Nobel Paul, erstwhile winner of the Swedish Abacus and Passbook Savings Account Prize for the Memorialization of One Man's Guilty Conscience, has lately taken to huffing about the Yellow Peril, like a turn-of-the-Twentieth British Israelite. They are monopolizing our rare earths! Will no one put a stop to this dastardly plot?
The column is the usual Krugmania, fulminating against the Chinese for using a combination of protectionist economic policies, subsidies of domestic industry, exploited low-wage workers, and an abundance of valuable extractable commodities to drive the rapid growth and massive expansion of its own economy, or pardon me, to "wage economic war" against the poor, pitiful West and its housing and credit crises, for which the Chinese are morally obligated to feel some kind of paralyzing pity. The Chinese are of course employing precisely the same means and methods of, what is the phrase, growing their economy, as the Western nations, in particular the US, used in their own climb to industrial dominance in the last century. This, in Krugman's estimation, marks the Chinese as immature. I don't know. Immitation is the sincerest form of flattery and all that.
Second, China’s response to the trawler incident is, I’m sorry to say, further evidence that the world’s newest economic superpower isn’t prepared to assume the responsibilities that go with that status.Interesting, isn't it, how "the responsibilities that go with that status" entail forgoing that status. Meanwhile, I'm sorry, the Western powers, especially the US, engage in "economic warfare" all the time. Cuba, Iraq, Iran, Libya, North Korea . . . the fact that our catastrophic economic embargoes are targeted only at the poor little countries that we, like the good bullies we are, prefer to kick around--you wouldn't want to pick on big China and get knocked in the nose, wouldja?--does not make us any less willing to engage the practice. And--here is the more essential point--there is the additional minor fact that not only are we happy to engage in "economic warfare," we are ready and willing at the drop of a fake hat to engage in real, actual, bombs-and-shit warfare. I mean, the Chinese used a little economic leverage to recover some imprisoned Chinese nationals; the United States destroyed Iraq and Afghanistan for no reason at all, and One-Term is doing his O-damnedest to do the same to Pakistan and Yemen. Who's the fucking nihilists here?
Major economic powers, realizing that they have an important stake in the international system, are normally very hesitant about resorting to economic warfare, even in the face of severe provocation — witness the way U.S. policy makers have agonized and temporized over what to do about China’s grossly protectionist exchange-rate policy. China, however, showed no hesitation at all about using its trade muscle to get its way in a political dispute, in clear — if denied — violation of international trade law.
Couple the rare earth story with China’s behavior on other fronts — the state subsidies that help firms gain key contracts, the pressure on foreign companies to move production to China and, above all, that exchange-rate policy — and what you have is a portrait of a rogue economic superpower, unwilling to play by the rules. And the question is what the rest of us are going to do about it.