So: China Wants a Trade War?

From the Financial Times.com:

China will impose retaliatory duties on US car imports in the latest sign of trade friction between the world’s two largest economies.

In a statement, China’s commerce ministry said on Wednesday that it was taking action in response to damage to its car industry from US “dumping and subsidies”. The move will affect several larger vehicles popular in China, including sport utility vehicles made by Germany’s BMW and Mercedes-Benz brands at their US plants. Shares of BMW and Daimler, which owns Mercedes, fell 5 per cent and 3 per cent respectively on Wednesday.

China overtook the US in 2009 as the world’s largest vehicle market, and sales there account for a substantial chunk of profits for BMW and Mercedes, who build the SUVs they sell globally in North America.

So as a result, what are "foreign" manufacturers doing? They're building factories in China for their vehicles. GM, the largest seller of "foreign" cars in China, builds almost all of its vehicles on Chinese soil. Employing Chinese workers in the plants. Employing Chinese to build the factories themselves.

I say: quid pro quo. China wants to break into the US market with its vehicles. I recommend a good 20% tariff on their conveyances as well. It's no secret that Chinese automobile showrooms will be opening up within another year or so on US soil.

Quid pro quo: if the Chinese want to sell cars here, they build their factories here using American contractors, materials, designers, plumbers, electricians. Then they staff those factories with American workers. Because, after all, just what is it that the Chinese haven't stolen or hacked or reverse-engineered from the US?

In the meantime, China's new aircraft carrier -- a true Blue Water (not littoral) ship -- was captured via satellite in trials on the Yellow Sea.


The former Soviet carrier known as the Varyag (keel laid as the Riga) now carries a Chinese flag after having been purchased for $20 million dollars at auction by a civilian front for the Chinese navy, then towed to China. News indicated its bulk was meant to be "only a casino."

At 1,000 feet and 68,000 tons, the carrier -- likely named Shi Lang -- will be the first major extension of Chinese sea power.

As was said in the 60s: "ass, gas or grass; nobody rides for free."

Another axiom immured in stone: you can count on the Chinese to lie.

BZ