Plea to China: Punish us, punish us - please zt

[Eliav]

Globe and Mail
April 26, 2004
By JIM STANFORD

Chinese officials have hinted darkly that if Canadian politicians express
support for Tibetan independence in meetings with the Dalai Lama, there
could be repercussions for our bilateral trade. We should take them up on
that offer. Because evidence is mounting that trade with China is doing us
much more harm than good.

A decade ago, we had a modest, balanced trading relationship. Since then,
our exports to China have grown by $2-billion, but our imports have grown
eight times as much. That makes China our second-largest trading partner,
and our $15-billion bilateral deficit with China is our largest anywhere.
That imbalance represents at least 50,000 lost Canadian jobs.

The bleeding is set to accelerate in the years to come, as Chinese exports
become more diverse and technically sophisticated. Stop thinking about
plastic toys from McDonald's; start thinking about cars, computers and
airplanes.

Free-traders have a pat answer. China is a low-cost, labour-intensive
country. It's good for us to import labour-intensive goods from them, in
return for exports of knowledge-intensive goods and services from us. That's
how "comparative advantage" works.

Yet this standard free-trade model has never been more out to lunch than in
explaining Canada-China trade. China's boom does not reflect a natural
abundance of labour (which every poor country has). It reflects a
deliberate, semi-planned strategy to construct advantage in increasingly
sophisticated industries, with the help of powerful state interventions:
subsidized capital, investments in infrastructure, a managed currency and --
of course -- forcibly cheap and compliant labour.

What's more, our puny stake in China's phenomenal growth -- $5-billion in
annual exports to a country with GDP approaching $10-trillion -- does not
mostly reflect our "brains." It is our traditional commodity industries
(minerals, agriculture, and other resources) that will capture most of the
crumbs coming our way from China's economic miracle. Believe it or not,
trade with China is reinforcing our historical status as an exporter of
staples, even as China works consciously to escape its role as a supplier of
cheap labour.

Standard market-oriented responses to the Chinese trade threat won't even
slow the coming explosion of our jobs-destroying bilateral deficit.
Investing in education for Canadian workers is no panacea: Workers in China,
India and elsewhere are just as capable of learning high-tech skills as
Canadians are. Easing interest rates won't help much, either, beyond undoing
some of the damage of last year's runup in the loonie. Pressing China to
float its currency (the current U.S. tactic) will make hardly any
difference: The yuan could double tomorrow, and companies would still be
flocking there.

Ultimately, it will require direct measures to limit trade imbalances and
force Chinese planners to buy as much from us as we buy from them.
Fortunately, by threatening retaliation for our hospitality to the Dalai
Lama, the Chinese have made it easy. We'll let them disrupt this one-sided
relationship, instead of us.

Applying my well-known diplomacy and tact, I therefore propose an escalating
eight-point strategy to disrupt our trade. It's sure to get a rise out of
China's touchy apparatchiks, and provoke the punishment we so richly
deserve:

1. Appoint Iona Campagnolo as our new ambassador to Beijing -- after she
takes an assertiveness-training course;

2. Make the Dalai Lama an honorary citizen of Canada (his purchases of
incense can stay GST-exempt);

3. Keep Canada's team home from the 2008 Summer Olympics in Beijing (The
only risk is that no one might notice.);

4. Lend Don Cherry to provide commentary for Tibetan hockey games (since his
days at the CBC are numbered anyway);

5. Invite Tibet to join NAFTA, with appropriate dispensation for its
softwood-lumber exports;

6. Pay $100-million to several ad agencies to sponsor patriotic Tibetan
festivities;

7. Organize an official bilateral cultural exchange. Tibet would send us a
travelling exhibit of artifacts from Lhasa, and we would send them DVDs of
The Trailer Park Boys;

8. Send MP Dennis Mills to shout "Vive le Tibet libre!" from a balcony of
the Imperial Palace.

If all else fails, we could always just get down on our knees and plead for
sanctions. I know it sounds kinky to beg for punishment. But in this case,
the facts are clear: It's gonna hurt them far more than it hurts us.

Jim Stanford is an economist with the Canadian Auto Workers union. He owns
no handcuffs, whips, or leather straps.