The Dangers of Imperial Thinking

It takes a special brand of self-flagellating bastard to go through the comments section of any article on China in any respected international publication. Filtering through the toxic dross formed by mixing xenophobic bile and the fifty cent party (not that those are mutually exclusive) is a task best accomplished with a plate of saltine crackers and tums. Simply tuning out, however, is something that I have not yet brought myself to do. Any way you look at it, reading what the other side puts out gives you some inkling of their thought process.

In this case, the "other side" means "anyone who is willing to spew vitriol on China," one way or another. One surprising observation I have taken from either side of the debate (pro- or anti-China) is the prevalence of a mode of thought that I'd believed extinct. Harking back to the international relations of the 19th century, many people - the pro-Chinese especially, but others as well - couch their debates in terms of Great Power clashes and Imperialism. This type of thinking is not only simplistic, it is outright bad for international discourse.

The absurdity of trade retaliation

My posting has been light of late, mainly due to the holidays, but news in the new year has not stopped rolling in. As we ended the year, the US has been proceeding on its investigation of Chinese products, deciding whether or not to impose antidumping duties on, among other things, solar panels. You might argue that all an investigation has to do is read back issues of the New York Times and Wall Street Journal, but there are some rules that go with this.

Antidumping tariffs can be unilaterally imposed under WTO rules by the aggrieved country provided there is a formal investigation; however, there is no external monitoring of each country's process. While one can be reasonably certain that most antidumping duties have at least some justification behind them, more often than not they are the ammunition of tit-for-tat trade wars, since most products that receive some form of subsidy are not covered by these duties. In less democratic countries, the process is also likely to be less transparent and more politically motivated.

China has responded, predictably, by launching retaliatory proceedings on the US' main export to China: foodstuffs and agricultural feedstocks, like DDG (used to feed livestock).  However, I'd argue that Chinese trade retaliation of this type is not only petty and silly, but also actively harmful to Chinese goals.

More on Keystone XL

I've posted before about the Keystone XL pipeline, but I wanted to emphasize one thing that hasn't been getting any coverage. While America dithers, the Chinese are heavily backing a project (Enbridge's $6.6 billion Northern Gateway) which will ship cracked bitumen to the west coast of Canada - as I mentioned before - where it will be shipped to East Asia.

Again, nothing wrong with selling oil to China, but it again goes to show that radical environmentalists who frame Keystone XL as a battle between "dirty" oil and carbon emissions vs clean energy and less oil dependence are presenting a false choice. Let me say this clearly: stopping Keystone XL will not stop the carbon emissions from bitumen extraction and cracking. It will simply send the oil to China instead of improving American energy security.

This. Debate. Is. Stupid.

I don't want to be against most of the environmental movement here. I really don't. I support their goals - most of them, anyway - and want to see a low-carbon, clean energy economy within my lifetime, even if that goal is ambitious. I want to cut our carbon emissions. I want to reduce dependence on oil in general, and foreign oil especially. And the way to do that is to encourage higher oil prices in America, and the most efficient way to do so is with a carbon tax. And that's that. Burning political capital on this will hurt the movement for years to come.

Furthermore, I'd have a lot of trouble believing that armchair environmentalists have really thought things through, particularly when what they are literally doing is an oblique method of supply disruption that will... uh... well, essentially change the flows of American money from Canada to enriching those lovely regimes in Venezuela, Gabon, Nigeria, and Saudi Arabia. Who would you rather buy from? South Park lifestyle enthusiasts aside, I think I know the answer.

Indium Blues

The NYT has published an article about China's nationalization of its rare earth mining industry. In the typical tradition of he-said, she-said science and policy journalism, it quotes Chinese officials as attempting to improve environmental compliance. However, it is also precipitating consolidation of the industry into state control.

The article explains that invocation of environmental rules might be part of a wider strategy to restrict rare earths sales without falling foul of trade regulations. I think this picture is right. In order to figure out why this is true, we have to look at the two international trade regulations that I think China is breaking most flagrantly, and the legal dodges they are trying to employ.

Solar Industry Dynamics and Solyndra

The solar cell company Solyndra failed last week, taking with it a $535 million DOE loan guarantee and triggering a press blitz in which every single anti-government pundit attacked solar energy as something that "doesn't work" and putting up Solyndra as everything that's wrong with government intervention. There's a much more subtle picture going on here, however, and the media storm glosses over many of the aspects that made Solyndra's failure inevitable well before the current slump in the solar industry hit.