Don't Believe Pundits who Praise China as a 'Capitalist Paradise'

American business should not envy China's economic policies.


Welcome to the punchline-deep mind of the Pajamas Media right:

Instapundit blogger Glenn Reynolds offers this advice on "how to take down an economic rival": "Export socialists to China. The Chinese don't want 'em there. They want 'em here."

Tee-freakin'-hee, Glenn.

[Check out a roundup of editorial cartoons on the economy]

Following the link, we're sent to a Daily Telegraph column by Londoner Boris Johnson in which he bemoans the "sclerosis" of British politics and asserts that,

We need to learn from [Chinese and Indian] success. In making their seismic conversion to free-market capitalism, they have adopted a culture that rewards hard work, where taxes are kept as low as possible, where it is possible to create jobs easily, where governments zealously guard their own economic independence and where there is a clear recognition of the role of ambitious infrastructure projects in creating growth and long-term competitiveness.

Lord have mercy.

Remind me again: What would Reynolds and co. say about an Obama administration that "zealously guards" American independence? I don't know about you, but I'm fairly certain we'd be hearing bleating and braying about "industrial policy," "crony capitalism," and "socialism."

In the world as it appears to an actual businessman, as opposed to the bizarro-world right-wing pundit class, China is anything but a free-market paradise. China's "conversion to free-market capitalism" sounds more Episcopalian than Southern Baptist, in a manner of speaking.

[Read Stephen Glain: The Danger of China Myopia in Washington]

According to a Washington Post report from last year, an American Chamber of Commerce delegation based in Beijing is fed up with handwringing about China's currency undervaluing (a real problem, to be sure). The elephant in the room is the Chinese government's ultra-aggressive industrial policy.

The Post's John Pomfret:

This includes China's attempts to use regulations to block Western firms from selling their products to Chinese government agencies, new Chinese standards in telecommunications and other areas that would stop the country's firms from buying Western goods, and new rules that force Western companies to give up technological secrets in exchange for a piece of China's market.

An example? China used to import close to 100 percent of its wind-power turbines. Now it makes close to 75 percent of those that are sold in China. Chinese firms haven't developed wind-turbine technology; they've just required that foreign firms selling turbines in China share that technology, and now their firms manufacture the turbines at a lower cost.

"For years, the Chinese government promised there would be a gradual opening of the market to foreign companies," said Christian Murck, the leader of the Chamber delegation. "But now in a range of areas, there is increasing protectionism."

What Murck and his colleagues want to see is a coordinated U.S. response to these pushes by China to halt Western products from entering China's market.

"The Chinese government is more than happy to keep the focus on the currency because it's not the real problem," said a member of Murck's team. "The real problem is China's industrial policy and our inability to deal with it."

Right. Sure. Milton Friedman and David Ricardo would be so proud of their new Asian acolytes.

Maybe when there's a Republican president again, these people will recover their senses we won't have to endure this garbage anymore.

  • See a roundup of editorial cartoons about North Korea.
  • Rick Newman: 11 Countries That Make America Look Good
  • Read about why a U.S. war with China may be inevitable