The World Bank’s Free Pass for China

Today, Robert Zoellick, repeating Beijing’s propaganda line on the global financial crisis, gave the Chinese a free pass on their mercantilist trade policies. So far, China’s principal plan to strengthen its “growth and recovery” has been to increase its exports. And its principal tactic for this purpose has been the lowering of the value of its currency to preserve price advantages for its exporters.

The plan, part of a package of export incentives, is evidently working. Last week, Beijing announced that November’s trade surplus is a monthly record. In the first week of this month, the People’s Bank of China, the country’s central bank, extended the export campaign by driving down the value of the currency almost one percent in one day in an apparent warning to the international community that it will continue to seek unilateral trade advantages.

These exclusionary trade practices are violations of its World Trade Organization promises (such as its discriminatory auto parts tariffs that were just ruled illegal) - yet the world meekly tolerates all misbehavior in the mistaken notion that the West needs China more than it needs the West.

Zoellick, instead of issuing bromides from Beijing, should start speaking clearly about China’s predicament - and stop handing out free passes to China at his press conferences.

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