In an editorial, the newspaper says the Obama administration should get tough on China.
We couldn’t have put it better ourselves.
The Washington Post published an editorial over the weekend looking at China’s massive industrial overcapacity and quest to be given market economy status. We’ve chronicled the related issues pretty extensively around these parts, and we were pleased to see the Post take a stand.
The Post notes that the United States is making “legitimate” demands that China reduce its excess overcapacity, particularly in the steel sector. While the newspaper notes that no one “should doubt the sheer difficulty, both economic and political, of restructuring the vast Chinese economy,” it also argues that China needs to get to work.
The United States has some pretty big leverage with China, given how badly the Chinese want to be recognized as a market economy, and the U.S. needs to stand strong, the Post says:
“The United States and many of its Western allies are balking, because they don’t share China’s view of the law, because they don’t want to give up this particular source of clout — and because China is not, in fact, a market economy.
The Obama administration should not yield on this point, unless and until China shows irreversible progress on economic reform, including, specifically, its subsidized excess industrial capacity. For the sake of prosperity in both countries, it’s a fight worth having.”
The United States isn’t the only country involved in the debate over China’s industrial overcapacity and market status. The European Union also is weighing whether to name China a market economy — and German Chancellor Angela Merkel said over the weekend that China must address its overproduction of steel.
But Merkel also appeared at a news conference with Chinese Premier Li Keqiang on Monday, noting that she is “convinced that we can find a solution on the lines of what was promised 15 years ago.”