White House Investigates China for being too Green?

by: Briggs Armstrong

The NY Times reports that China has rebuked the Obama Administration for its “inquiry” into China’s policy of subsidizing “green” industries.

“I have been thinking: what do the Americans want?” said Mr. Zhang, the vice chairman of the government’s National Development and Reform Commission. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”

Mr. Zhang is exactly right. This whole crusade against China subsidizing green industries was started by the United Steelworkers Union (which gave millions to purchase President Obama in the 2008 presidential campaign).
Here are a few more gems (as reported in the NYT piece) from Zhang, who also happens to be the head of China’s National Energy Administration:

On Sunday, Mr. Zhang called the Steelworkers’ complaint unfounded, saying that American subsidies to clean-energy industries proposed by the Obama Administration total $60 billion, and the American government has slapped domestic-content provisions — so-called “Buy American” clauses — on certain clean-energy products.

“What America is blaming us for is exactly what they do themselves. Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”

Should American officials pursue the Steelworkers’ complaint, he added, “the only ones who will be humiliated are themselves.”

Government subsidies are always a bad thing. They distort markets and transfer wealth from a large, often ignored portion of the population, to a smaller, more politically connected portion. This effect is universal, regardless of which government is doing the subsidizing or which industry is receiving the subsidy. What makes this story so interesting, even outright humorous, is the unabashed manner in which Mr. Obama and his fellow democrats sell their green souls for union votes.

Reposted from Mises Economics Blog