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Comment by mingdingo | Hacker News Reader

Looks like it's to protect domestic Chinese films, as the 3-D version is still playing in theaters.

Alternate point of view:

"According to a report in the Hong Kong newspaper Apple Daily, the move was made at the urging of propaganda officials who are concerned that "Avatar" is taking too much market share from Chinese films and drawing unwanted attention to the sensitive issue of forced evictions."

Apparently only 20 foreign movies are allowed to be shown in Chinese theaters every year.

Regardless of the reasons, it's still a very fenced-in society.

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Someone tell me again why we allow Chinese imports?

We should seriously consider allowing only 20 kinds of Chinese-made consumer electronics into the US, and banning any model which gets popular enough to threaten non-Chinese manufacturers.

Even if somebody else bangs their head against a wall, you do not magically become better off by banging your head against a wall.

(See http://web.mit.edu/krugman/www/negot.html)

If another person starts banging their fist in your face, you do not magically become better if you start banging your fist in their face. In the short run your hand will hurt and it won't make your face better, but in the long run it might prevent them from continuing to bang their fist into your face.

Similarly, in the short run, cutting off china will hurt economically (both our people and theirs). In the long run, if it causes them to open up, it will probably benefit us and their people (though not necessarily their leadership).

That plan (opening up society by economic isolation) didn't work particularly well for Cuba, Iran, North Korea, or any other embargoed country that I know of.

"[And] as Frederic Bastiat put it, it makes no more sense to be protectionist because other countries have tariffs than it would to block up our harbors because other countries have rocky coasts."

That's an excellent equilibrium analysis, and I completely agree with it. In the short run, treating protectionism as constant, retaliatory trade restrictions will harm the US as well as China.

The only flaw in that reasoning is that it treats tariffs as being unchangeable. China and other countries have eliminated protectionist policies in response to retaliation. As far as I know, no coast has even become less rocky in response to a blockaded harbor.

Do you remember the thirties? Retaliation against retaliations are a recipe for shutting down world trade.

Embargos are a (light-weight) act of war. And like most acts of war, they hurt the civilian population more than they hurt the leadership.

Protectionist trade policies to attempt to balance a huge trade deficit is just economic policy. Free trade is all well and good when both partners are trading freely, but China is not doing that. China uses forced-low labor costs, low quality standards, low environmental standards, and import quotas to ensure they come out way ahead on the balance of trade. This hurts US businesses who can't compete with Chinese companies prices because they have to adhere to much higher standards/costs.

Simply adding tariffs to Chinese imports wouldn't be enough though; while that would bring some money into the US budget, it probably wouldn't help US businesses start up to pick up the slack in imports, and US consumers would wind up footing the bill. We'd also need a reduction in taxes on businesses that produce the sort of products we import from China so we can kickstart US production. The lower taxes should lead to more US jobs and lower prices on the products, and the government shouldn't lose revenue because it'll be getting the extra tariff money. (It'll be a long time before US businesses can produce the volume of goods we import from China, even with tariffs and tax breaks in place.)

> Free trade is all well and good when both partners are trading freely, but China is not doing that.

There's no need for the other partner to trade freely to make free trade from your side advantageous to you. Have you heard of the theory of comparative advantage (http://en.wikipedia.org/wiki/Comparative_advantage) that explains why this works?

"The fundamental logic of free trade can be stated a number of different ways, but one particularly useful version - the one that James Mill stated even before Ricardo - is to say that international trade is really just a production technique, a way to produce importables indirectly by first producing exportables, then exchanging them. There will be gains to be had from this technique as long as world relative prices differ from domestic opportunity costs - regardless of the source of that difference. That is, it does not matter from the point of view of the national gains from trade whether other countries have different relative prices because they have different resources, different technologies, different tastes, different labor laws, or different environmental standards. All that matters is that they be different - then we can gain from trading with them." (http://web.mit.edu/krugman/www/negot.html)

Did you read the Criticism section of the wikipedia article, which describes how the theory doesn't apply if capital flows freely (as it does) and that even when it did apply it created uneven distribution of wealth which have caused countries like China to enact policies to ensure that Comparative Advantage does not apply?

At issue here is that we're not trading goods we're good at producing for goods China is good at producing. Instead, we're trading the future earnings of US citizens for Chinese goods. That might have been ok when our debt was low and the goods were low-value, but now our debt is unsustainable and the goods are high technology which we invented and used to produce, but don't anymore. The theory was that we were becoming a 'service economy', but the Chinese don't want or need our services. We have nothing to trade with them except our future financial independence... and the future is coming very quickly.

You are free to save and pay off your debts.

Cuba and Iran are only isolated from the US, and the US was never a major part of their foreign trade. North Korea only survives because it is propped up by external powers (China, and to a lesser extend, South Korea).

In contrast, China makes many consumer electronics intended for the US market.

International isolation worked fairly well for South Africa. Threads of isolation also opened up the Japanese and Chinese markets to US-made auto parts, and it opened the domestic Chinese consumer electronics market to foreign-made semiconductors.

> International isolation worked fairly well for South Africa.

Not really. South Africa's main exports were mainly commodities and anything it imported it imported through proxies (such as Taiwan or Israel). Disinvestment was a major boon to South Africans since it allowed them to buy foreign assets at cents to the rand.

Sanctions also increased the Laager mentality which probability increased the length of Apartheid.

The reasons why South Africa turned to CODESA had probably more to do with the happenings in the Soviet Union and Eastern Europe (since South Africa’s biggest problem was that the ANC&SACP movements were funded by the USSR).

Btw, I don’t know why you say that it worked, when by all objective measures black people are worse off now than under Apartheid (e.g. a 13 year drop in life expectancy). South Africa is on track to become a failed state in 10-15 years.

See this link for a comparison: http://www.reddit.com/r/AskReddit/comments/aja38/nonamerican...

Think on the bright side: if the US economy can survive this kind of one-sided trade it can survive anything... The same can't be said of other economies.

Which?

Someone tell me again why we allow Chinese imports?

Because if everyone responded to import quotas with import bans, we wouldn't have this nice world economy everyone's so fond of.

Because if everyone responded to import quotas with import bans...

I proposed an import quota identical to the Chinese one, except that it only applies to China.

If every country responded in kind, then no country would be doing what China is doing. (No one provoked China's bad behavior.) If every other country responded in kind only to the one country who is behaving badly, that single country would be isolated and might change their behavior.

That works better in middle school than it does in macroeconomics. Each country has different economic needs - strict tit for tat won't necessarily lead to an optimum. Don't worry, America has its share of import quotas and tariffs, as well.

If society reaches the point where all countries but one are aligned on the same principles, and only one country in the world is behaving badly, then I think your solution will work.

haha, well said

Think about it. If Chinese Govt is willing to sell stuff to us dirt cheap by using dirt cheap labor, It is beneficial for us to buy them. It makes economic sense for us to buy something for less than what it's worth. We gain by doing so. The Chinese Govt gains too, by getting more than what they pay for the people. The real losers are those who work dirt cheap. So, end of the day, it's not our problem. If I can save 200 or 300 dollars on my iPhone because of them, I am glad.

But...that's what THEY are doing. Do you not become the same when you do that?

If someone punches you and you punch them back, do you become the same as them?

There is an important difference between starting a fight and finishing one.

> There is an important difference between starting a fight and finishing one.

Not really. The difference is usually in how you do it.

Funny, when I read this initially my first thought was: it would be inconsistent for the US, as champion of the free market, to attempt to impose its will on a country such as China by itself acting contrary to free market principles.

Then I remembered: the US has not had a problem doing just this with/to other countries before; for example South Africa. There were not only the apartheid-era sanctions; there have also been the post-apartheid era "negotiations" (for example, 'halt your satellite development program or we will oppose your entry to GATT').

It seems fair to say the US has used "steamroller" tactics like this before. So maybe the question should rather be: why is the US handling China differently?

A) We like the toys.

B) We already get occasional shipping containers full of Chinese illegal aliens sneaking into the country. We don't want them to be armed and trained soldiers too.

> Someone tell me again why we allow Chinese imports?

It's called freedom.

... and don't forget the greed. Looked at where stuff is made recently? I see a ton of stuff around me that comes directly from China. We like to buy stuff cheap from China, and we like to ignore the fact that China is not a free society. If we cared we would vote with our wallets, but we don't care. And in my opinion so don't a lot of Chinese (I didn't say all, or even most, but a lot) as long as it brings in the cash and the BMWs.

"...and drawing unwanted attention to the sensitive issue of forced evictions."

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