David Pilling writes in today’s FT that China is addressing inflation by “banning” it:
This month, Unilever agreed to pay a fine of $300,000 after China’s National Development and Reform Commission accused the Anglo-Dutch company of creating panic by announcing its intention to increase detergent and soap prices.
The fine comes a month after China successfully “discouraged” Unilever from going ahead with the above-mentioned price hikes.
In effect, China has suppressed Unilever’s right to express itself freely through prices.
Unilever execs shouldn’t be surprised. Unilever was the marquee sponsor of an exhibit earlier this year at the Tate Modern art museum in London. The artist who created this exhibit was Ai Wei Wei, a Chinese national known for his increasingly biting criticism of the Chinese government. The Chinese government has since arrested Ai, suppressing his right to free expression, too.
One cannot equate a person’s freedom with a company’s. But the West has long tolerated China’s suppression of individual human rights, with some Western thinkers figuring that as China turned to global market capitalism, it would adopt other Western habits, too. Instead, China is applying its old habits — stifling what it doesn’t like to hear — to “market” participants.
Rather than importing freedom, China is exporting — through distortion of supply and demand that affects global markets — Nixon-style price controls.
— Nicole Gelinas is a contributing editor of the Manhattan Institute’s City Journal.