The Economist vs. The Economist (on China trade policy)

I had always assumed that The Economist fairly tightly controlled the views that their stable of bloggers expressed, forcing them to maintain the view that low production costs are uber alles. But I see I was wrong:

[I]f America thinks the undervalued RMB really is a problem, both because of its effects on American workers, its effects on America's macroeconomic imbalances, and its global contribution to instability; and if America thinks that blanket tariffs on Chinese imports would help correct those imbalances in the absence of revaluation, then absent some other convincing argument against them, America should implement such tariffs and seek agreement with other importing countries on harmonising them. That this will make a nationalist Chinese public angry is not much of an argument against doing so. To get more deeply into the weeds, it's clearly true that with China having re-prioritised growth over stability in the context of the global recession, local government officials and Party cadres are going to be opposed to RMB revaluation or anything else that interferes with their ability to report back high growth figures from their provinces, and forestall embarrassing factory closures and unrest. This is the clearest sense in which Beijing's "freedom of movement" is likely limited. But if you accept that RMB undervaluation is a major problem and is indistinguishable from broad export subsidies, then to say that America should do nothing to respond to it is to say that we should run a trade deficit and put our own manufacturers at a disadvantage to help maintain political stability and the popularity of the government and Communist Party in industrial regions of China. That's where it seems to me that we would be taking responsibility for something that is none of our business. China is responsible for its own internal politics, and is quite capable of handling them.

Naturally, Ryan Avent is not happy. He is increasingly isolated as a defender of China's currency peg, but he makes up for it with voluminous output...