To: Hawkmoon who wrote (66226 ) 9/20/2010 1:36:04 AM From: TobagoJack Respond to of 218675 and this is good, explains in part your lack of logic of what is and must be, wishing to adjust exchange rate this, terms of trade that, and security points of departure somewhere else. hilarious, trulyonline.wsj.com U.S. gets irrational on China By ANDREW PEAPLE It makes sense that U.S. politicians want to have a go at China with an election looming. That doesn't mean there is much consistency to their approach. Take two current issues: The debate about China's currency and a proposed investment in the U.S. by Anshan Iron & Steel Group. Critics of China's currency policy, which leaves the yuan undervalued against the dollar, say this is costing the U.S. jobs. The artificially cheap yuan, it is argued, keeps Chinese goods cheap so that U.S. industry is uncompetitive. A proposed remedy is to slap tariffs on Chinese imports. Jobs, though, don't seem so important to opponents of an investment by state-owned Anshan in a joint venture with U.S.-based Steel Development Co. The companies plan to build a steel plant in Mississippi, but Anshan could ultimately invest in as many as five. On the face of it, such an investment should add to employment in the U.S. But that isn't enough for the deal's critics, who fear Anshan is making its investment merely to obtain technological knowledge, which it will then use to make the Chinese steel industry even more competitive. Some are even alleging the investment—Anshan will own 14% of the joint venture—could threaten U.S. national security. Perhaps the world's only superpower is alarmingly vulnerable to a $23.5 million investment made by a Chinese company in a joint venture with one steel firm. More likely, this is out-and-out protectionism by those who want to stop the rise of Chinese steel companies at the expense of U.S. firms. Certainly, it betrays muddled thinking about China. On the one hand, China's currency policies are criticized for their effect on jobs; on the other, Chinese investment that could help create jobs is treated with suspicion. Worse, as Derek Scissors of the Heritage Foundation points out, while putting tariffs on Chinese goods or blocking Chinese investment will hurt China, it will also hurt the U.S. economy. Making Chinese imports more expensive isn't likely to lead to defunct U.S. industries springing back to life: Goods would instead be sourced from places like Vietnam, whose currency has also been devalued lately. For sure, there are legitimate complaints to make about Beijing's approach to trade and investment. The same could be said for Washington. —Andrew Peapl