Atlantic Community:Global Must Read Article "China Responsible for an Open Trade War"

Editorial, The New York Times | January 13, 2010

China’s merciless economic strategy exacerbates the global economic downturn and international tension. ++ This process of manipulating the currency markets and drowning the world with Chinese exports makes global economies defenceless. ++ Their “beggar-thy-neighbour” policy weakens nations´ fiscal efforts to recover from the crisis.++ We are on the brink of an open trade war. ++ China must instead invest in domestic social policy in favour of the Chinese people rather than at the expense of other countries´ economies.

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Wed, Jan 13th 2010, 23:19

Ann H. Sontz, EuropaSurvey, Silver Contributor (26)

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One might add that China's social policy is underdeveloped and its future intricately linked to its overblown development stance. The Three Gorge Dam,begun in 1992, is incomplete. Its goal of safe and plentiful water for the many has been shadowed by delays,the flooding of vast tracts of land along with the displacement of millions of family farms and farmers, and their migration to the cities as landless workers in search of declining factory jobs. Global recessionary trends in the Pearl Delta have only added to an already numerous migratory labor force that now numbers over 250 million.

The Chinese consumer base is more than populous, but constrained nevertheless and limited to ca. 2-3% of the population. Moreover, investments on this part of the population appear to have resulted in a property and housing bubble,and with that propsect, to a rising threat of inflation.

A recently announced policy is to direct more investment funds into derivatives and futures that are tied largely to property and housing purchases and accounts. This movement of capital, a diversifying strategy, is, however,bound to the fortunes of the same people at the top. Should they be negatively affected, there will be personal and corporate losses in major cities and the Capital.

It may be a long time before China turns again to social policy development. It has its hands full providing for the policy of "social harmony" on which its its centralized state government prides itself.

Thu, Jan 14th 2010, 15:03

Juliette Dixon, Science Po Lille, Gold Contributor (118)

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Thank you very much Ann for this interesting and very detailed comment.

You said China was quite busy with sustaining its "social harmony", isn´t investing more in domestic social policy as suggested by the New York Times part of this foremost objective? You concluded also that "It may be a long time before China turns again to social policy development", What could push China towards that direction?