GlobalCapital
Copying and distributing are prohibited without permission of the publisher.
China-bashing like Japan-bashing in the 50s: WTO Official
China is confronted by what Japan went through in the 1950s, ‘60s and ‘70s when it is accused by the US of dumping its products, a WTO official says
The recent dispute about cheap exports, which has seen the US take China to the World Trade Organization (WTO) over its car exports, looks like a rerun of the complaints heard about Japan when its economy was growing into a global powerhouse, Alejandro Jara, deputy director-general of the WTO told Emerging Markets.
“I am not surprised,” Jara said in a recent interview on the sidelines of a conference on emerging markets organized by “The Economist.”
“Way back in the 1950s, 60s and the 70s you had the same issues with Japan. It was Japanese cars, then Japanese radios, Japanese video recorders, Japanese cars ... Japan-bashing all the time. The US and Europe were bashing Japan. Then came the turn of Korea, there was some Korea-bashing. China has grown, it’s China’s turn.”
India or Brazil, depending on which country’s economy will grow fast on the international market, might be next in line, Jara said, but warned that the traditional way of looking at individual countries as the sole source of products in global trade was outdated.
| More from Emergingmarkets.org |
| Investors 'extremely bullish' on emerging markets |
| Bad PMIs pointing to China hard landing? |
| Rising home prices put off China rate cuts |
“Let’s say we have a product, an iPhone, that is exported in final shape to the US and costs, say, $200. The value added in China is maybe less than $10. So if you measure the trade in terms of the value added, the figures change dramatically: the deficit of the US with China goes down, and the deficit of the US with Japan, Malaysia, with Korea and other suppliers of pieces of the iPhone goes up.”
“The reality of today is that the products are increasingly not Chinese or American, they are simply made in the world,” Jara added.
He said he hoped the recent measures taken in the eurozone to try to contain the debt crisis will “stabilize the situation” and lead to a recovery but added that there were concerns over many of the measures taken by various countries in the world to restrict trade in one way or another during the crisis, and which have not been rolled back.
“Today the stock that we have of trade [restrictive] measures is more or less equivalent to the whole of Africa’s trade or the trade of India plus the trade of Brazil. It is a concern because of this accumulation of trade-restrictive measures, “ Jara said.
