Free trade, but not for all – the WTO-column

(later also at Chinabiz)
The China-US trade relations saw this week a ritual upsurge in attention as one of another US-official came up Beijing to pursue their mantras: a floating renminbi, more action again copyright infringement and of course: more access to the Chinese market for American businesses.
Especially the last demand must have been followed with increasing amusement by Chinese companies that try to enter the US markets, as producers of agricultural products, textile companies and CNOOC feel what a free market really means, while the US tries to curtail fair Chinese competition it tries to block with legal and diplomatic tricks.

More than any other country, China has benefited from a relative free trade. Relative, as it started off with a heavy regulated economy. While Chinese companies at a micro level have to clear panacea to beat competition, China at large had. While the ideology worldwide increasingly embraces free trade, China developed its current basis by heavy government protection.
Some of the politically less correct economists – my favorites as you might guess - encourage continents like Africa to close their borders and develop their economies first based on their own strength, and only then engage in worldwide free trade. Only after gaining enough strength domestically, those countries can compete with the developed world.
Under the pressure of the WTO-regime China has been moving towards free trade, and faces the proponents of free trade, the EU and the US, who despite their economic position and free trade ideology, just seem to be unable to do what they are asking the rest of the world.

Of course China still scores pretty low in the official rankings that try to measure the level of freedom in its economy. Developed countries can define much better what free trade actually is with subsidized agriculture, just as China officially still embraces its communist ideology, although in all cases it seems just a convenient way to conceal their focus on their own interests.
In China foreign companies increasingly have to live up to a sudden rise in class-driven conflicts, as workers’ and consumers’ interests seem increasingly to play up. Siemens mobile phone service is the latest victim, but the list of foreign companies that have to live up to social standards that seemed to be dead for the past decade.
That new emergence of social standards in China might be as important as the American way to sell protectionism as free trade.

Fons Tuinstra