China’s top price regulator announced on Friday that Unilever (China) Co Ltd would face a fine of 2 million yuan (about $303,000) over statements that led to price hikes for Chinese consumer goods . . . “Such moves have severely disrupted the market order,” said the statement.
This is almost too crazy to believe unless you read it for yourself: http://news.xinhuanet.com/english2010/china/2011-05/06/c_13862231.htm
Beijing’s all-knowing masters of markets have fined European firm Unilever 元2million for simply suggesting that it might have to raise prices! This takes the idea of market control to a whole new level and in exactly the wrong direction.
Why are prices soaring in China? IT’S THE CURRENCY PEG STUPIDS!
China’s economy is booming and the purchasing power of the Chinese people SHOULD BE SKYROCKETING. In a normal economic world, the Chinese currency would rise on China’s economic strength and higher interest rates and the Chinese consumer would see falling prices for imported items and all global commodities, particularly FUEL and FOOD. Manufactures in China would benefit from reduced costs of raw materials and be able to drop their own prices relative to the Yuan. But noooooooooo!
The people who should really be fined for “severely disrupting the market order” are the idiots who control the market, not the firms struggling to make sense of it. By holding the Yuan down for far too long in order to kill the last few manufacturing jobs still lingering in America and Europe the Boys from Beijing are also punishing the Chinese people and the firms that bring them great products. Then in typical Communist style, they BLAME THE VICTIM for the problem and throw in a little public humiliation to boot.
Meanwhile, back at the ranch, US and European firms and governments are still lining up to embrace China’s “vibrant market economy.” Much the way they rushed to invest in Germany and the Soviet Union during the early part of the 20th century . . .
– Greg Autry teaches Macroeconomics at the Merage School of Business, UC Irvine and is co-author (with Peter Navarro) of the new book “Death by China” www.gregautry.us