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"On my part, I remain committed to the process of dialogue. It is my firm belief that dialogue and a willingness to look with honesty and clarity at the reality of Tibet can lead us to a viable solution."

China's paradox; Bigger economic clout will mean it's more dependent on Western approval

February 7, 2008

Posted By Claire Hoy
The Sudbury Star, Ontario
6 February 2008

There's a joke making the rounds these days that officials sent a
shipment of lead back to China. Why? Because it had too many toys in it.

And while everybody knows the economic impact the burgeoning Chinese
economy has had on our products - and more especially our prices - the
New York Times reports this week that growing inflation in China is
hitting Americans in the pocket books.

No doubt it's the same story for Canadians, since we, too, have become
considerably more dependent upon Chinese imports for our consumer goods,
particularly toys, footwear and clothing.

As the Times explains, "Soaring energy and raw material costs, a falling
dollar and new business rules (in China) ... are forcing Chinese
factories to increase the prices of their exports ... "a reality which
contributed to the inflation hike in North America."

Everybody understands in vague terms just how big a player China has
become, but few realize the magnitude of its current impact upon the
world, a reality brought home to your correspondent with the recent
receipt of an e-mail on the subject.

For one thing, China has become the third largest producer of cars in
the world, behind only Japan and the United States, and is rapidly
closing in on the two traditional world leaders in that field.

It's also the world's largest consumer of coal, grain, fertilizer,
cellphones, refrigerators and televisions, and is the leading importer
of iron ore, steel, copper, tin, zinc, aluminum and nickel. The list
goes on, but you get the idea.

And for those who still think that exempting China (along with India and
Russia, as the now-debunked Kyoto Accord did) from emissions rules would
be a good idea, here's a little food for thought on that file.

It seems that China used 2.5 billion tons of coal in 2006. How much is
that? Well, it's more coal than the next three highest consuming nations
- Russia, India and the U.S. - combined. China also has more than 2,000
coal-fired power plants and is adding a new one every week.

In 2006, China passed the U.S. as the world's top carbon dioxide emitter
and in 2005, China's sulfur-dioxide emissions were nearly twice those of
the U.S.

The Times quotes Nate Herman, director of international trade at the
American Apparel and Footwear Association in Arlington, Va., which
represents several major clothing and footwear makers, as saying that
"Companies are now ordering (from China) for the spring of 2009.
Factories (in China) are coming back and asking for 20, 30, 40, 50 per
cent price increases."

Are those costs be passed on to consumers, he was asked. "It's going to
be hard to avoid some increases."

Which, of course, brings up another question of China's place in the
world. Given its status as a leading dictatorial nation, and its
horrendous human rights records, will higher prices for Chinese goods
buy a moral conscience for more consumers?

As things stand, sadly, most consumers would rather save a dollar or two
and buy the cheaper Chinese-made goods than spend more and buy from a
more reputable source.

To be fair, it's often difficult to find goods that aren't made in
China, but it's also fair to say that most consumers don't make much of
an effort looking for alternatives and likely don't even give a passing
thought to what sort of country China is when they're picking up a cheap
toy at their local Wal-Mart.

It was noteworthy last week to see Prince Charles's announcement that he
will not attend opening ceremonies for the Beijing Olympics in August
because of his close interest in and support for Tibet, a country that
China simply took over and has brutally repressed for decades.

Prince Charles has made no secret of his support for Tibet and the Dalai
Lama. To his credit - and unlike the previous Liberal regime in Ottawa -
Prime Minister Stephen Harper drew loud criticism from Chinese officials
when he recently openly greeted the Dalai Lama in Ottawa.

These are small steps, but steps nonetheless.

The only real way to force China to clean up its act is through economic
pressure, which is why, in a sordid sort of way, that country's growing
inflation may turn out to be good news in the long run.

Why? Well, as we've said, if Chinese inflation means higher prices for
Chinese goods, then consumers, even if they don't give a fig about the
morality of their purchases, start looking for alternatives, then maybe,
just maybe, China will change.

A more dramatic stance would be for all the western countries to boycott
the Chinese Olympics. But that's not happening.


Read Claire Hoy every Wednesday in The Sudbury Star.

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