The Rise of China and redirecting Softwood Lumber

China has been all over the economic news lately.

They’re eating up “other peoples” (I use that term loosely) oil reserves and buying up refineries and pipelines. (though the UNoCAL bid fell through.

They’re beneficiaries of the “outsourcing” scourge of the US and in turn selling their goods back at rock-bottom prices.

It is clear that China will be, if it isn’t already, the most influential economy in the World and it appears as though it will only be more so as time goes on.

Take, for example, todays article from the Washington Post talking about how the revaluation of the Yuan did nothing to stop the flow of cheap goods from China. It was expected that this revaluation would make the Yuan grow in value… making Chinese goods less cheap and thus less of a “threat” to industries in the US, Europe and elsewhere. Well, it turns out that the “floating” of the Yuan did nothing of the sort… and now many around the world, but especially in the US are calling for China to “take action” to increase the Yuan.

Ironic isn’t it, that the Western Capitalist World is now angry at a Communist nation that has fully embraced capitalism in its’ economy… to the point where those Western Capitalists are calling for the Communists to reign in the economy?

It’s just gotta make you laugh… does the term… “You Asked for It!” ring a bell?

On another tact… as I recently reported, China and Canada signed a “strategic partership“. Mainly ensuring that economic and trade ties would continue to grow. Softwood Lumber is one area where trade could really take off… and Prime Minister Paul Martin (PMPM) apparently discussed just that with the Chinese President last week.

No wonder… with our major trading partner for softwood currently imposes obscene and illegal tarriffs… why wouldn’t we sell our wood to China, we certainly have plenty of room to grow.

Check out these charts… they are of softwood lumber exports from British Columbia since 1990. The raw data is available from the BC Stats website.

First of the US and other major softwood buyers (click for larger image):

Notice the major dip in 2003, that was due mainly to the tariffs and duties and the associated mill closures and layoffs.

Now the rest of the world… notice orange… that’s China, and stacked directly above is Hong Kong (click for larger image).

I for one have no problem with China asserting its’ place in the world… as their economy has become more open, there has also been a marked shift in day-t0-day life of the middle-class in China. Those middle-class people have more freedom then any of their relatives before them. Ironically.. again… I also belive that as the rich get richer the poor will get poorer (because that’s simply the nature of capitalism)… but China will be unique. Their middle class wants democracy and knows its’ value… but the going is good, so why bother… the Poor on the other hand will conitnue to get poorer, and this will spell trouble for the Communist Party. As it becomes more clear that the government is responsible for the plight of the poor, the poor will rise up and demand change… at the same time the middle class will wake-up from their cell-phone induced coma and realise that the time to act is now.

This will cause the democratic reform that we are all waiting for.

But until then, we’ll have to stay the course… and let capitalism work its’ ironic magic.

2 thoughts on “The Rise of China and redirecting Softwood Lumber”

  1. Chris

    What economic structure do you want in place of capitalism?

    My family has risen from poverty in the first 30 years of the last century to comfortable middle-class and so have almost all the families I am acquainted with…all riding the engine of capitalism.
    Please explain as consisely as possible what you want to replace it with?

  2. I didn’t suggest that Capitalism needed replacing… it’s the best we have right now… but it certainly isn’t perfect, and it’s darker side is often simultaneously ignored and exploited.

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