Sunday, 4 September 2011

Tim Worstall writing at the Adam Smith Institute blog might be ...

... considered a little shallow in his conclusion, that we should accept state subsidies by the China government as a bonus, a bonus for whom I wonder, not the British public nor the China public, the blog may be read here.

So, are we the recipient of subsidies by the China government, or might it be "smoke and mirrors" of a dishonest kind, consider for yourself ...
... any subsidy must be paid from the general population of the subsidising country, the factory workers of China.
... the cost of unemployment in the recipient market is paid by the population as a whole, including borrowings, not the industry in the market that imports from China, or any other subsidising country or group of countries (the EU and farming is an example closer to home).
... the price at the till will not relate to the subsidy, but be exactly what the market will bear, not its intrinsic value, therefore any benefits of subsidy will not reach the consumer except during poor trading periods.
So, what should be our response to any subsidies .......

1 comment:

  1. I just read the article.

    It's really depressing how naive people can be.

    Of course China is subsidising its exports. This is being done to kill off competitors. It might be great in the short term for consumers but the reality is that soon the Chinese will unfairly command the whole market and will be in a monopoly position, while we end up paying out ever greater sums in social welfare.

    This is a lunatic position. God preserve us from idiologues.

    Competition is good when their is a level playing field. But Sacrificing industries to predatory competitors on the basis that they don't have an agenda is ludicrous.