Xi Jinping, Free Trader?

The Communist Chinese party boss warns the German chancellor and seems to lecture Secretary Yellen on ‘objectivity.’

Xie Huanchi/Xinhua via AP
President Xi, right, and Chancellor Scholz at Beijing, April 16, 2024. Xie Huanchi/Xinhua via AP

Xi Jinping, committed free trader? That’s the canard the Chinese party boss is trying to palm off on the West, warning Chancellor Scholz of Germany to be “wary of the rise of protectionism.” The remarks at Beijing come amid growing unease in America and Europe over a looming wave of China’s so-called green exports. Beijing’s big export push — a case of industrial policy run amok — is meant to ignite China’s economy at the West’s expense.

Mr. Xi’s call for “looking at production capacity issues objectively” follows Secretary Yellen’s purse-rattling during her recent visit to Beijing. There, she told the Mandarins that “Washington will not accept new industries being decimated by Chinese imports,” as Reuters put it. Ms. Yellen lamented the so-called “China shock” that devastated America’s industrial heartland. “President Biden and I will not accept that reality again,” she said.

All Ms. Yellen needed was a shock of orange hair. She omitted, Reuters notes, to “threaten new tariffs or other trade actions” in the event that China moves ahead, as it is likely to do, with its “state support for electric vehicles, batteries, solar panels” and other “green energy goods.” The secretary’s words amount to yet another hollow threat by the Biden administration — which, these columns noted, has been parading its weakness with “‘Don’t’ Diplomacy.”

In the same vein, Mr. Biden is warning Mr. Xi against aiding Russia in its invasion of Ukraine, without taking any steps to stop it. Mr. Biden is also warning, as Beijing steps up pressure on the archipelago over shipping rights in the South China Sea, China that America’s commitment to defend the Philippines is “ironclad.” For that matter Mr. Biden avers that our support for Israel is ironclad, too, even as he holds back our ally from reprisal against Iran.

The impression this creates in Beijing — not to mention Moscow, Tehran, and Pyongyang — is that Mr. Biden is, as they say, all hat and no cattle. So it’s no wonder that Mr. Xi has the gall to present himself as a steward of the global free trade system that America and Europe constructed in the decades after World War II. The very system, we might add, that Communist China, since its entry into the World Trade Organization, has done so much to undermine.

“China’s exports,” Mr. Xi preens, have “enriched global supply and alleviated global inflation pressure.” He adds that these green exports — electric cars, solar panels, lithium batteries, and the like — are helping “the global response to climate change and green and low-carbon transformation.” He omits to mention that these cheap green exports come as a result of the mobilization of state industry, plus huge subsidies, in defiance of free trade principles — and sustainable economic policy, as a Wall Street Journal editorial observes.

Beijing’s export binge has been in the works for months, the Financial Times says, as a way for the regime to “compensate for a property slowdown by investing in manufacturing.” The effort appears to be paying off, if today’s growth numbers are a signal, as China’s gross domestic product registered a 5.3 percent jump in the first quarter of the year. Yet as China recovers from its self-inflicted real estate asset bubble, Western industry bears the brunt.

The “influx of cheap exports,” the FT writes, is already sparking “wave of anti-subsidy investigations into Chinese goods” in the European Union, which is as concerned as Ms. Yellen by Beijing’s “supply shock.” Mr. Scholz lamented that China’s “unilateral economic policy decisions” are “creating big structural difficulties for companies in Germany and Europe.” Prime Minister Li Qiang replied by touting “the survival of the fittest.”

China’s policies on trade — like its aggressive military posture toward its neighbors — are hardly those of a responsible member of the global community. They underscore the error made by America and the West when they admitted China into the WTO with loopholes that have let Beijing tilt the global playing field on trade. The question now is how, or if, the West can disentangle itself from its dysfunctional trade relationship with China before it’s too late.

This article has been updated from the bulldog to include a reference to the Wall Street Journal’s editorial on Chinese economic growth.

The New York Sun

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