Not only is the US pushing China economically to their advantage, Europe is also firing up their engines. Perhaps the onset of a worldwide credit crisis is slowing down European growth by too far a stretch that the Europeans now think of China as a threat rather than a partner. There is certainly an element of truth in this: earlier I reported that China is now tranding less and less with Europe than ever before, while China's trade surplus pose no evidence of slowing down.
A day after we saw France's Nicolas Sarkozy hugging China's Hu Jintao for closing 20 billion Euros worth of airline and nuclear deals, Sarkozy said that "China must help build a global consensus to curb greenhouse gas emissions," otherwise face tariffs on exports to the European Union, because "it wouldn't be fair that [only] European manufacturers would be penalized." Moreover, a hot debate is erupting within the European steel industry that accuses China of dumping metallic coated sheets and strip steel in the EU. South Korea and Taiwan are also causing "material injury" to European steel producers. Where is the love?
It appears that this economic war is between Europe and developing economies, not just China. However, China is the most representative country of Asia ex-Japan, where many of the countries that threaten European economic growth can be found. Europe is countering such threats with a threat of its own: heading to the WTO to file a complaint and issue sanctions.
But does that really work? China currently produces a third of the world's supply of steel. The magnitude of that supply justifies the price that Chinese steel is sold. Economic growth and reduction of poverty are main priorities for developing economies in Asia. These goals justify the increasing greenhouse gases produced by those nations. Yes, every country must be responsible for saving our planet, but developed economies such as the US and the EU must lead the way if they are serious about achiving sustainable growth, rather than penalize other countries for not immediately following their path.
What do you think?
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