Source: Christian Science Monitor
By JONATHAN ADAMS | Correspondent of The Christian Science Monitor
from the January 2, 2009 edition
BEIJING - In recent years, China scrapped many of its export-friendly policies – a turn welcomed by foreign competitors as a step toward freer, fairer trade.
But now, with the economic downturn in full effect, China is scrambling back toward the riverbank. The government has reversed itself on tax rebates and other export-friendly policies, restoring perks it had only recently scrapped.
Beijing's about-face risks raising tensions with the US and other trade partners. Washington and others have long complained about China's "unfair" trade policies and a flood of cheap Chinese imports. The US welcomed the 2007 elimination of some tax rebates as a sign of progress, only to see many of them now restored.
But analysts here say China isn't trying to undercut foreign competitors.
Rather, it's giving life support to flailing exporters – and trying to stave off the social unrest it fears will result from massive factory layoffs. http://www.csmonitor.com/2009/0102/p06s02-woap.html