Don't make me laugh!
Nations have only two options when it comes to making public sector purchases, just the same as a private sector business or individual. You can choose to either buy the cheapest, or you can buy from your own local producers regardless of the costs (trade protectionism). Trade protectionism is a disaster in all but the short term, it is just suicidal to overpay for things that you can get cheaper and of comparable quality elsewhere.
Now, ask yourself a question: who makes the cheapest.... well, just about anything you can conceive of? I'm pretty confident your answer is "China" to that question.
So in China this issue is a non-issue -- either they buy from local producers or, err, they overpay. That isn't protectionism, that's practicality!
Now the Americans? Well, that's something different. This squawk from the Chinese is pretty clearly just a shot over the bow of the good ship US, who started the protectionist noises a while back as described in the linked article above.
And don't even get me started on the French! (Uh-oh, too late...)
Farm subsidies immediately spring to mind, where the French government pay French farmers to raise crops and livestock, because they wouldn't be able to survive if they were left to compete with non-French farmers. THAT is the very epitome of protectionism.
Plus laws that protect the brands of certain locally-produced wines and cheeses, so that in spite of the fact you can make the exact same product elsewhere and not be able to tell the difference even if you're an expert, you will still have broken French law and they will seriously come after you and hunt you down like a dog with the full resources of the state until you roll over and admit you are wrong and will stop.
Similarly if you run an international business and make the mistake of employing French people. (This is not intended as a slur against the French people by the way, generally speaking I find I like them just as much as any other people, perhaps more, and that they are innovative and creative by nature. No, this is a slur on their politicians' brand of National Socialism and associated rules of law that in truth are counter-productive to the well-being of their populace.) Anyway, back to business now I have that out of the way. If you operate a business, or even a group of loosely-related businesses, in France in addition to some other set of countries, and you need to let some French staff go for any legitimate reason, you will be pinned to the wall and you will be made to give them jobs elsewhere in your operation, no matter where that might be and in spite of the fact that perhaps those people do no have suitable skills, or even speak the relevant language to enable them to operate effectively in that place. I mean, how protectionist is that? You are expected, or should I say forced because they can and will persue you until you bend over, to give them a job in another country at the expense of some poor working spiv already in that country -- in other words the French government expects the government of some other country to pay the cost of another person being unemployed. The reason of course is clear -- they pay massive unemployment benefits in France, which they in truth cannot afford to pay but they have promised it to the electorate, and so they desperately want to avoid having to pay out on that promise if there is any way possible of doing so.
The French are the globe's uber-nationalists. They can't compete, due to their choice of National Socialism and its massive fiscal burdens, and so they have no choice but protectionism to try to contain their budget deficits.
But I don't see an article this morning about protectionism in the States, or France. Or anywhere else for that matter. Only China.
Why is that? I'll tell you why on this one too: its because the Chinese are one of the few nations actually able to compete effectively in the world market, and the leaders of Western nations are rightly fearful of their rise to dominance in the future. The only way we can hold back and slow the rise of the Chinese is protectionism, as the US government have clearly indicated already.
Wednesday, 17 June 2009
Chinese trade protectionism?
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