An update to Friday’s post:
Bloomberg (and the The New York Times) reported this weekend on China’s response to U.S. accusations over Chinese green energy subsidies. Zhang Guobao, a top energy official in China, directed a number of blunt comments towards the Obama administration:
Should the Americans pursue the subsidy issue with the World Trade Organization, Mr. Zhang said, “the only ones who will be humiliated are themselves.”
“What America is blaming us for is exactly what they do themselves,” Mr. Zhang said. “Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”
Mr. Zhang accused American trade officials of repeatedly delaying talks over the same issues that the White House now wanted to investigate and suggested the administration was playing election season politics.
Mr. Zhang called the Steelworkers’ complaint unfounded, saying the Obama administration had proposed subsidies totaling $60 billion for clean energy industries, adding that the American government had placed domestic-content provisions — so-called Buy American clauses — on certain clean energy products.
“I have been thinking: What do the Americans want?” said Mr. Zhang, the vice chairman of the government’s National Development and Reform Commission. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”
He makes a number of very obvious points: this case is likely without merit as the U.S. heavily subsidizes our domestic green energy industry, and that the Obama administration is misdirecting U.S. anger over the economy towards China.
The New York Times also published this weekend a China bashing op-ed by Senator Sherrod Brown (D-Ohio). Senator Brown, no stranger to criticizing U.S. trade policy, has written a book — Myths of Free Trade — covering it. Departing from the almost universal consensus of economists across the political spectrum, Brown argues that no one outside of rich investors benefit from what he calls “unregulated trade” and that free trade has led to global economic stagnation. Despite what the Times might tell you, denying reality is a time-honored tradition shared by politicians across the political spectrum.