Economists Urge Export Tax Rebate Cuts as Trade Surplus…
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Economists Urge Export Tax Rebate Cuts as Trade Surplus Hits Record - Caixin
Interesting that Chinese economists agree that massive persistent trade surpluses are not strength but economic weakness. Chinese economists have suggested reducing tax rebates on exports, and redirecting the capital to household incomes.
This is broadly in line with Western economists call for China to boost consumption and stop engaging in disruptive trade practices where *subsidized* Chinese industries swallow market share instead of more *productive* firms.
This directly contradicts the narrative that trade surplus/deficit is a matter of 'winning' or 'losing' a trade war in the mercantilist sense where technological superiority or superiority in economic scaling leads to an edge over deficit countries. The truth is - as Setser and Pettis have argued - persistent and large surpluses and deficits *both* cause economic pain.
#local
Interesting that Chinese economists agree that massive persistent trade surpluses are not strength but economic weakness. Chinese economists have suggested reducing tax rebates on exports, and redirecting the capital to household incomes.
This is broadly in line with Western economists call for China to boost consumption and stop engaging in disruptive trade practices where *subsidized* Chinese industries swallow market share instead of more *productive* firms.
This directly contradicts the narrative that trade surplus/deficit is a matter of 'winning' or 'losing' a trade war in the mercantilist sense where technological superiority or superiority in economic scaling leads to an edge over deficit countries. The truth is - as Setser and Pettis have argued - persistent and large surpluses and deficits *both* cause economic pain.
#local
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