Posted by Lew Rockwell on September 11, 2009 01:08 AM
Writes Rob Esposito:
In response to your blog post, I also recently returned from a trip to China. In addition to being more capitalist, they are far less authoritarian than us. I saw only one armed officer during my entire two week stay. I wasn’t required to strip down for airport security. Conversely, I was greeted by dozens of armed officers as soon as I landed in the U.S. and told to put my cell phone away or it would be confiscated. I just laugh when people say we live in the freest country on earth.
On top of that you can still smoke pretty much everywhere. And buy beer and wine just about anywhere…
“the big competitive advantage that china has had, beyond the obvious (inexpensive labour, lax environmental and working standards etc..) is the export tax refund.. for everything a factory exports, they can get up to 18% back from the government.. this is how many factories make their sole profit.. most factories operate on margins of only a few percentage points, sometimes even operating at a loss, because they know that they get a sizeable chunk back from the government at the end of the year.”
I know Chinese monetary policy helps their exporters, but I didn’t realize they also had tax incentives to support exports. Good to know; thanks for sharing that.