Sir, The claim by Chen Deming, China's minister of commerce, that China “remains open for business and the rest of the world can benefit” is absurd on its face (“Thriving China is ever more open for business”, Comment July 26).
The hallmark of Chinese industrial policy has been a potent combination of mercantilist and protectionist practices that favour Chinese enterprises and workers at the expense of the rest of the world. On the mercantilist front, almost a decade after its entry into the World Trade Organisation, China continues to illegally subsidise exports, artificially undervalue its currency, heavily engage in state-sanctioned counterfeiting and piracy, and cut its productions costs significantly through lax environmental and worker health and safety standards well below international norms. Meanwhile, its “Great Walls of Protectionism” include, most egregiously, both forced technology transfer and forced research and development offshoring to China by foreign companies. In addition, a whole host of non-tariff barriers make it very difficult for foreign companies to compete. The practical results of China's “China first” industrial policy has been to breed huge structural imbalances in the world economy that have led to gross domestic product growth rates well below potential output in both the US and Europe for much of the last decade and collateral high unemployment while China booms.
