China is a communist country, with one ruling party. At the same time, it seems to be embracing capitalism to the best of its manufacturing ability.
You would think these two philosophies would be incompatible, but they are not, and tire buyers in the United States have been the beneficiaries for years. So have tire dealers.
The excessive tariffs placed on Chinese consumer tire imports have, at least temporarily, put an end to that. Perhaps when the tariffs expire on Sept. 26, 2012, prices will go down, but that’s another discussion for another time.
During a recent visit to Shanghai, China (see my story on page 38), I studied China’s English language newspapers to see if they could help explain this seeming contradiction. On the surface, the coverage appeared well-rounded.
Bad news seemed almost as prevalent as good news.
“Tough times ahead for China steel companies,” read a headline in the “China Daily.” Rising raw material prices and a decrease in vehicle and appliance sales were cited as conflicting problems. As a result, Chinese steel manufacturers said they may cut production.
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In a related story, passenger vehicle sales in May declined month-to-month, the third such decline in 2010. The secretary general of the China Passenger Car Association said people should consider buying cars in the summer months “as automakers will launch promotions like price cuts to perk up their sales.”
“U.S. takes aim at China steel drill pipes,” was a top story in the “Shanghai Daily.” “The United States slapped a nearly 16% preliminary duty on more than $100 million worth of steel drill pipes from China” after complaints from the United Steelworkers (USW) and U.S. steel companies.
“The companies and union also want additional duties ranging up to 274% to stop sales of the Chinese product in the U.S. at what they said are unfairly low prices.” (Sound familiar?)
The U.S. Department of Commerce had previously levied “anti-dumping duties” of up to 143% and “countervailing duties” of up to 437% on Chinese steel wire products used in storage rack systems; duties of more than 200% on steel gratings; and “steep anti-dumping and countervailing duties” on imports of oil industry steel pipes from China.
No wonder Chinese steel companies expect tough times ahead.
“Investors worry about labor costs,” was a front-page headline in the “Global Times.” The crux of the story centered on striking workers at Honda Motor Co. Ltd.’s two assembly plants in China. According to the article’s author, Honda “offered wage increases of between 24% and 32% to the disgruntled employees, bringing their pay to about 1,900 yuan ($278) per month.” An analyst was quoted as saying China won’t lose its edge in cheap labor.
On its surface, the coverage seemed fair and balanced. However, in “Freedom of the Press and Democracy in China,” author Jeffery Wartman shed some light on the historical developments leading up to a “more free” press in China.
Wartman was an undergraduate student of political science at Elmhurst College in Illinois at the time he wrote his manuscript, which was published in 2007.
“In China, the press is not officially suppressed,” he wrote. Under the Chinese Constitution, citizens of the People’s Republic of China “enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.”
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Despite what the constitution says, the press is still highly regulated, according to Wartman.
“Chinese reporters enjoy a Constitutional right to a free press, but in practice the ruling party in China, the Communist Party, overseas all press that is put out in China to ensure it is positive to the regime. In fact, 80% of all press coverage must be positive or favorable to the regime.”
I guess in the end, it all depends on how you define communism. According to my “American Heritage Dictionary,” communism is “a system of government in which the state plans and controls the economy and a single, often authoritarian party holds power, claiming to make progress toward a higher social order in which all goods are equally shared by the people.”
That is exactly what China is. Karl Marx, the father of modern communism, is probably rolling over in his grave because the country is embracing capitalism, but it is not inconsistent with that definition.
If you find yourself reading any English-language version of Chinese-based news articles, keep these thoughts in mind.
As one tire dealer told me during the trip, “Never forget — the Chinese government owns everything.” That includes the news organizations.
If you have questions or comments, please e-mail me at [email protected].
