China's Version of "Free Trade"

Date: Monday, July 22, 2002 11:37 AM

*** H-1B NEWSLETTER ***

Get the Facts on H-1B at
www.ZaZona.com

I hope all of you have catched up on my newsletters because I'm back and I
have plenty to talk about. I spent the last two weeks in China and that
means no internet access. They have internet cafes but I was told that a
security officer would probably watch everything I did because I would be
under suspicion.

I went to a variety of places from Beijing, Wu Xi, Shanghai, and Jia Xin
(known as the birthplace of the Chinese Communist Party). It was a great
vacation: I got to walk on top of the Great Wall of China and I saw the
Leaning Pagoda (China's Leaning Tower of Pisa). I even walked through
Tienanmen Square.

Just in case all of you are worried that I have become a new born globalist
I decided to wrote about China and "Free Trade".

One thing I noticed is how few foreign products you can buy in China. That
is because companies can't sell products in China unless they set up a
factory there. Volkswagen must have been one of the first to do so because
almost all the foreign cars in Shanghai are Volkswagen. There are a myriad
of weird Chinese brands that I have never seen before and don't want to
again. They are as bad as Yugos!

You can finally buy a Dell computer in China since they fired US workers and
moved production to China.

China imposes tariffs on almost everything foreign. The tariffs are only
part of the story since the Chinese government will use all sorts of
bureaucratic means to thwart would be importers.

The WTO seems to think China will cooperate in their "free trade" agenda.
You can read all about it right here:
http://www.wto.org/english/news_e/pres01_e/pr243_e.htm

Here China's plan to lift the trade barriers by the Bank of China. Of course
the only one that can enforce this promise is the Chinese government and the
whatever pressure the WTO can impose. Next time you go to Wal Mart you might
ask how much the tariff is on "Made in China" - I suspect the answer will be
there is not tariff. It seems to me that China should be eager to end all
tariffs immidiately since the USA is so generous to them. Why wait until
2006?

This bank is owned by the government so you can consider this an official
promise to end trade tariffs:

http://www.bank-of-china.com/english/speech/Confident_WTO1.shtml
In the industrial sector, China will slash the preferential tariffs for
industrial products from an average of 24.6% to 7.1%. No tariffs will be
imposed on hi-tech products such as computers and communication apparatus.
By 2006, tariffs on automobiles will come from 80-100% to 25%, whereas that
for spare parts will be 10% only.

One of the good things about the Communist Chinese government is that they
give companies preferential treatment based on the number of people they
employ. The down side of this policy is that the government doesn't have a
minimum wage so pay isn't an issue. Here is why I doubt that China is going
to reduce the tariffs on automobiles:

http://seattletimes.nwsource.com/news/nation-world/html98/trad_19991116.html
Increased imports of foreign automobiles could result in the firing of
500,000 Chinese automotive workers over the next decade, Chinese and U.S.
researchers say. By 2006, China will reduce tariffs on automobiles to 25
percent from the current 80 percent to 100 percent. China also will allow
foreign financing of car purchases.

*** HINT OF HYP0CRISY??? ***

China is proof that protectionism works because they have the only booming
economy in the world. Their growth rate is 17%! All the other countries that
believe in the free trade myth have faltering economies. The fact that the
government of China is one of the worst violators of the "new world order"
of globalist trade policies doesn't discrourage them from condemning our
meager trade protections. If you read this web page you would think the
Chinese were hard core free traders:

http://www.china.org.cn/english/2002/Mar/28264.htm
China Wednesday responded strongly to the US decision to impose tariffs of
up to 30 percent on steel imports, threatening to complain to the World
Trade Organization (WTO).

I have a lot more to say about China but will save it for future
newsletters. As a parting thought I decided to share with you Microsoft's
boosterism of free trade with China. Microsoft talks about free trade with
China with a forked tongue. They are just tying to save their own asses from
the rampant bootlegging in Asia. They are hoping the WTO can put pressure on
Asian governments to stop the bootlegging. I'm sure the Chinese government
will stop the bootlegging as soon as Microsoft moves all of their software
development, with it's jobs, to Shanghai.

I bought a bootleg versions of Microsoft XP Pro, XP Office, and Nero 5.5 for
$0.75 per CD. They had just about any software title you can think of,
especially Microsoft. DVD movies costed the same.

http://www.microsoft.com/issues/essays/03-06china.asp
While U.S. software industry revenue derived from the Chinese market has
increased in recent years, it is far from reaching its full potential. The
primary barriers -- market access and limited intellectual property
protection -- can be addressed in significant part by China’s accession to
the WTO.

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