M.R. Henderson

Krugman to China: Go Green or Pay the Price

Reading Krugman's column, I believe there is an argument to be made that it is irresponsible of him at this time to suggest "green" means by which rising global protectionism could be implemented against China. A China without growth could disintegrate into a larger polluter than it is currently.

I'm reminded of an essay that detailed how the Chinese might diplomatically outflank global protectionism (and specifically a US consumption tax) making use of "green" arguments. To level the playing field, as it were, I leave the link below.

sinocircle.wordpress.c.../

Krugman to China: Go Green or Pay the Price

Thanks for the update on Krugman.

However the world's current views will remain in history, the argument that the U.S. wiped out the native americans and the British used child labor should not be an indignant explanation for the destruction of cultures and the exploiting of childhood in 2009. I believe this goes for pollution, too. Not to mention the scale on which industry is now working. That said, of course the name of the game is push and pull, talk loud, talk soft, but it is also a strategy of moves within moves.

I would note a slyness to Krugman's actions in the face of a nation that uses diplomatic tactics not unlike a five year old throws temper tantrums.

China Investor Update

To have China pay for expensive Brazilian deep-water exploration which no one else would pay for, can only open up cheaper supplies to everyone else. Even if China takes all the oil, it is oil they are not taking from somewhere else. This is clearly a win for Brazil, for China, only time will tell if they are spending too much.


On Apr 22 10:44 AM CautiousInvestor wrote:

> Chinese corporations and the state owned sovereign wealth fund are
> striking keen deals across the globe and and are securing long-term
> access to needed resources at bargain prices.
>
> The Chinese have what nobody else has at the moment: cash. This gives
> them tremendous leverage as does their willingness to strike deals
> with countries that have strained relationships with the US, e.g.
> Venezuela.
>
> They appear to be focusing upon oil and minerals, both essential
> to the Chinese economy. In the literature there is a debate of sorts
> whether these deals will expand supplies or simply give China secured
> access at the expense of other buyers such as the US, Europe and
> India.
>
> However it unfolds, China is doing whats best for China..........and
> I wish the US would follow its example.
>
>

China Investor Update

Regarding interesting articles, a (subscription) FT article on Chinese property (quoted here: sinocircle.wordpress.c...) has a comment I found interesting, that even if Chinese lending is being fraudulently diverted into dead mortgages, this will serve the purpose of shoring up demand in the near term.

Also, an article in the WSJ (online.wsj.com/article...) suggests Chinese bank regulators may retroactively ask banks to reappraise their short term loans, which have been leaking into stocks. If this happens, in the next few days and weeks there may be quite a bit of selling of Chinese stocks as these short term loans are repaid or reallocated out of domestic equities.

With exports still contracting - falling 17% in march - this is not yet bottoming. FXP, anyone?

Will U.S. Growth Beat China's in 2009?

Or will China continue to juice its stimulus package of export rebates by devaluing the RMB, and the rest of the world, fearful of depression, will not respond with tariffs but rather swallow, sinking deeper into debt, while China accumulates more savings and continues to expand?