A Castrated Economy

China has confirmed that they will not change their decision to place higher tariffs on some imported auto-parts. Actually all auto parts that are 60 or more percent of the complete price of the total vehicle will have a tariff of up to 30% placed on it, or the same tariff as a complete imported car.

China's Department of Industrial Policy the leading economic planning agency says that these measures are required to promote local production. In reality, this measure will shut down the import of most auto parts to China from the rest of the world.

In response the US has said that it has according to U.S. Trade Representative Rob Portman, "threatened to take action at the World Trade Organization unless China took measures soon on the tariffs." To which China has replied that it is acting well within WTO's rules.

For all that think further trade will help to encourage economic (I'm not even talking about political, religious, or social) freedom, this is further proof to the contrary. China is using the US until it can become self sustainable, at which point America will become expendable.

The most outrageous part is not China's action but the US response!

What ever happened to the country that would start economic wars and crush the opposition? What has happened to the country that brought down the mighty British Empire, crushed all the European colonial powers, wiped the floor with Nazi Germany and Empyreal Japan, and put the miracle Japanese economy into a permanent comatose state?

If we don't wake up soon and face our real foe, what we did to other countries will pail in comparison in what will happen to us.

China Cutting Taxes

Figures issued by the National Bureau of Statistics and the People's Bank of China respectively show that China's industrial and manufacturing sectors are continuing their meteoric rise at higher then predicted rates. China's industrial output for January and February grew 16.2 percent when compared to the previous year’s numbers.

The major sector of improvement was the automobile industry, which churned out 40.6 percent more automobiles in the first two months when compared to the same time last year. During the same period China's output of steel products and cement both rose by 21.3 percent.

In an even more interesting development China is cutting taxes to help encourage household spending. This is being done to try to ensure that China is not completely dependent on exports to grow its economy.

For the US this is not good news, because this is a national security measure more then a sign of any economic reform by the PRC. The decrease in reliance on exports is meant to try to eliminate China's dependence on the US. After the PRC develops a self sustaining economy it will have no use for America, and will be able to then move to stop financing the US debt. Without Chinese cash the US consumer will not be able to finance his massive debt, thus not be able to buy any more products and this will lead to the collapse of the American economy.

The US government should take a lesson from the Chinese and try to protect its own economy. This can be best and most fairly done by reducing trade with China until the PRC starts to follow free market rules, and stops using a communist planned and protected economic system.

Deception

J. R. Nyquist has written another great column on the deception being pulled by the “old communist block” on the West. In it he states how the Russians have successfully baited the US into a trap when it comes to Iran. Now the US is in a no-win situation with regards to reacting to the Iranian nuclear threat. If they let Iran have nukes then the mullahs will be free to do as they please with no fear of retaliation, but if the US decides to strike or let Israel strike this will mean an almost certain civil war in Iraq, and a massive retaliation by Hezbollah against Israel. He also has a great quote, which helps to illustrate the forgotten Chinese and Russian alliance: “We are counting on the continuation of close contacts with our Chinese colleagues [in this matter],” says the Russian foreign minister.

However, I have to disagree with his assessment that the Russians are the ultimate leaders of the "old communist block". The real king pins are the Chinese who are just letting the Russians do all the dirty work, and saving themselves for the ultimate showdown with the US. The Chinese are working to build alliances that will ultimately help them secure the upper hand in any future conflict with America, and they are focusing a lot of their effort on Latin America (especially Cuba, Venezuela, Mexico, and Brazil).