Magazine

Deconstructing China's WTO Participation


Jeffrey E. Garten takes a very unbalanced view in "When everything is made in China" (Economic Viewpoint, June 17). If, as Garten suggests, Americans should worry about concentration of manufacturing in China, then should the Chinese and people in other regions of the world be concerned about the concentration of research and development, information technology, biotech, etc., in the U.S.? As dean of a prestigious American school of management, Garten has the responsibility to foster a more harmonious world view. Creating suspicion and distrust will not lead us to a prosperous world anytime soon.

Ching Horng

Management Dept. Head

National Chung Cheng University

Chiayi, Taiwan

Some interesting facts could be added to Garten's column. China has three votes in the WTO, and every other nation has one. Hong Kong has a vote it received before becoming part of China; Taiwan joined as a "separate customs territory"; and China itself has a vote.

Chinese companies are building free-trade ports and foreign trade zones in the Caribbean Islands. They are also in Mexico. By using this system, the Chinese companies can get around tariffs, duties, and quotas. In reality, very little trade actually takes place between an exporter and importer. The beneficiaries seem to be the multinational companies and category-killers, which can purchase directly from manufacturers.

Peter T. Milne

Toronto "Investors are ignoring all the good news" (Business Outlook, June 17) tries to give some possible explanations, primarily related to the distortion of the reporting pictures given by Corporate America. I suspect that we are now in a well-prepared [yet] put-on stage in which the big guns of U.S. investment banking (Merrill Lynch, Credit Suisse First Boston, and the like) behave intentionally as if there were no recovery at all. By encouraging a panic mood, [they] push stock prices down to realize the best buys right now at the start of the recovery. Bleeding clients and reeling from scandal, the analysts of the investment banks still seem to keep their leadership and control over the mood on the financial markets in the U.S.

J.P. Zecevic

Cologne As an American living in eastern Germany for 17 years, I think you made the right choice with Cem ??demir as a "Stars of Europe" (European Edition Cover Story, June 17). But you missed the target with Maybrit Illner--a carbon copy of Sabine Christiansen. The latter earned her spurs as the top anchorwoman on Germany's late-night news program, Tagesschau, and she was the first to put a serious talk show on German TV (as you describe Illner's show) with top politicians, scientists, and literary and artistic persons.

Well, one out of two ain't bad.

David B. Rush

Leipzig "Get in, get out, and move on" (Finance, May 27) fell short in explaining that quick and excessive trading is dangerous for investors in general. Studies reported the surprising finding that not only do the securities investors buy not outperform the securities they sell enough to cover trading costs but, on average, the securities they buy outperform those they sell. This is one more reason why active managers often don't beat the Standard & Poor's 500-stock index, either.

Armin Stuck

Rijeka, Croatia In his letter to BusinessWeek, Larry McCracken, vice-president for public relations at Boeing Co., responded to "Boeing's secret" (Cover Story, May 20). He offers up "third-party reviews" of the article from three investment banking firms. Merrill Lynch & Co. has already agreed to pay $100 million to settle with New York Attorney General Eliot Spitzer. (Of course, the firm denies any wrongdoing.) The other two, Morgan Stanley and Goldman, Sachs & Co., are currently under investigation by the Securities & Exchange Commission and perhaps as many as 40 state Attorneys General. Of course, these firms are innocent until proven guilty, but it would seem that McCracken could find more credible sources to endorse his firm's practices.

Aaron Gewirtz

University of Maryland

University College In Europe

Ramstein-Meisenbach, Germany Just as President Bush spooked the Japanese markets by using the word "devaluation" instead of "depreciation," your writers made the same mistake ("Say adi??s to the super peso," Business Outlook: Mexico, June 17). "Devaluation" is the lowering of a currency's value through government action. "Depreciation" is caused by a number of market forces. As for the story in question, the Mexican peso has depreciated 5.1% since April, 2002. I'm unaware of a recent official government devaluation, which in the past had caused far wider ramifications for that country.

Eleazar O. Velazquez

Arlington, Va. "The threat of protectionism" (Editorials, June 3) says that "unqualified support of free trade makes for sound politics as well as sound economics." Should international trade not have some element of justice? Is it just that those of us who are fortunate enough to have a decent standard of living enjoy low prices because someone who made the product gets $2 per day? Would it not be just for the U.S. to say that we will not accept imports unless the workers are paid a minimum of, say, $6 an hour? Such a policy would raise living standards and offer all workers at least some measure of human dignity, to which we are all entitled.

Gregory Hurley

West Point, Ga.


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