China, US, Protectionism....Oh my

As the economy continues to strain American and Chinese businesses, we are beginning to see an increase in protectionism ideology. This sentiment is clearly out of concern that too much reliance on the other country's economy and business base will result in further losses. Last Friday, China passed a law that placed restriction on expedited parcel delivery services like Fed Ex. Additionally, Coca-Cola was denied in purchasing a large Chinese juice maker. Such moves as these point to the increasingly domestically based movements to localize business. Laws have become written in ambiguous manners concerning American businessmen as they feel they are in a difficult position in negotiating and expanding their enterprise. The Chinese have effectively created laws which can be used to their advantage when applicable but are vague enough to control foreign investment.

It is only natural for countries to work towards a self-sustaining and self-interest policy when economic times are debilitating prosperity. However, if China and The United States begin to break their ties in trade there will be long-lasting negative impacts. China depends on utilizing the US market as much as the US depends on China to produce goods at a cost far lower than they are capable. Instead of restructuring foreign business policy it would behoove both nations to work together in this difficult time. There are clearly aspects of our trading habits which could be improved as the US has a seemingly insurmountable deficit. However, at this time, I believe shifting China's policy in doing business with the US will only do more harm.