Washington Post,Dec.22, 2008 on page A1,A4: Despite free-market pledge many nations adopt restrictive policies. The Law of Comparative Advantage should be enforced by trading nations.
China: Offering tax rebates on exported products like steel and textiles, a policy that foreign critics call a subsidy for Chinese exporters.
"Exporting firms tend to be innovative, dynamic and capable of generating good job growth," said Eswar Prasad, a professor of trade policy at Cornell University and senior fellow at the Brookings Institution in Washington. "If trade restrictions caused by trade wars shut them down, their suppliers shut down, job losses get worse, and you quickly have a spiraling downward effect on the entire economy."
Such scenario may or may not be seen for Sino-American economics. That remains to be seen,however.
Francis Shieh a.k.a. Xie Shihao on Monday,December 22, 2008 at 11.28 a.m.
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