For The Star, Business Columnist David Olive writes:
…Beneath the veneer of spectacular Chinese infrastructure projects at home and Wal-Mart stores abroad seemingly stocked with nothing but Chinese goods, China remains a poor, developing country without a Western-style social safety net. It remains an exporter with only a nascent consumer economy, heavily reliant on imported technology, and propelled by an artificially devalued currency that effectively takes jobs from other countries, notably its fellow developing nations.
On the latter score, “China’s bad behaviour is posing a growing threat to the rest of the world economy,” Nobel laureate economist Paul Krugman wrote recently, describing Beijing’s persistence despite years of external criticism of refusing to let its currency float the way the loonie does, to the detriment of Canadian exporters.
China is inviting a retaliatory blowback, likely from the United States and the European Union, where high unemployment can be traced not so much to China’s low wages but Beijing’s persistence in refusing to let the yuan rise to its natural level and its manic addition of manufacturing capacity in a world struggling with overcapacity.
