So after boosting export rebates again (and again), some corners of the world are taking steps to relevel the competitive playing field. Unsurprisingly the CCP is unhappy at anything which makes them (and their state-pwn3d corporate cronies) fairly compete against others. So they trot out the predictably trite PR campaign complaining about foreign protectionism.

The Ministry of Commerce has denounced trade protectionism, saying many countries are resorting to it even as the West prepares for formal action against China's exports policy.

"Countries have announced all types of protectionist measures as the global financial crisis weighs on domestic demand and international trade," the ministry said on its website.

Maybe we can find some Randites and Panda-lickers to trot out to say that the CCP fulfilling their obligations under the WTO is irrelevant and China must be allowed to pursue whatever trade policies they wish, no matter how badly it skews the free market.

This makes the 7th time in the last 10 months where export rebates have been raised.

The government has raised tax rebates for more than 600 export items, some up to the maximum level possible, as it stepped up efforts to provide succor to businesses battling the global economic slowdown.

The Ministry of Finance said Monday that it had increased tax rebates ranging from 5 to 17 percent on export products, including ethanol, toys and sewing machines, effective June 1.

The export tax rebate scheme allows enterprises to get back part or all of the money they have paid in value-added tax, which stands at up to 17 percent, for items that have gone into the production of export goods.

But the latest rise in rebates effectively scraps the taxation on certain products, such as sewing machines and television transmission equipment.

When items are sold abroad at a price cheaper than they can be sold at home, that's called dumping. For all of the CCP's squawking about "Free Trade" and "Free Markets", what they really mean is they want access to dump mainland goods abroad while being able to protect their own domestic market, as unimpressive as it is, from effective competition by taxes and customs regulations.

e.g. Every week has a story in the local papers about HK Customs and Excise seizing hard drives and other electronics that are in the process of being smuggled in to the mainland. Free Trade and Free Market access to the mainland, Donald Tsang? Forget the sellout CEPA, which requires HK to train their cheaper replacements on the mainland via JV's and minority partnerships, tear down the mainland's pain in the ass customs, corporate ownership regulations and VAT rebates. Then you'll be getting the job done for all of Hong Kong and not just a few tycoons that have you on their payroll.

You can almost call me a monkey's uncle. The HKEx has scrapped the closing auction.

The stock exchange's controversial closing auction system, which came under fire after a plunge in HSBC shares om Monday, has effectively been scrapped.

The move is likely to allay certain market worries but triggers concern that bourse operator Hong Kong Exchanges and Clearing (0388) will in future find it difficult to launch new policies.

See... almost a monkey's uncle. The problem for HKEx isn't launching new policies, it's that the focus for the new policy launches have been to make the market less transparent and more open to manipulation by their crony tycoons.

I believe when the policy of the closing auction was first brought up there was even a member of the board for the HKEx that suggested changes on the grounds that it was going to be manipulated, like it's been since Day 1 and excessively with HSBC a few days ago. Do you think this marvelous man who could predict the future outcome of the policy will be reinstated on the board? BWAHAHAHAHAAHA! Do you think the geniuses who instituted failed policies will be held accountable and sacked? BWAHAHAHAHAAHA! Can you say "accountability" and "offices of the HK SAR government" in one breath and keep a straight face? BWAAAHHAHAHAHAHA! Me, neither.

Do you think the HK SAR government hopes that scrapping the closing auction will be enough to make the scandal over the manipulation of the HSBC closing price go away? Damage control mode. I'm not holding my breath waiting for the SFC to take out any big players who have been involved in stock price manipulations since the introduction of the closing auction.

UPDATE 9:30pm
After reading a bit more nuanced SCMP report on this, let me ammend some of this. The biggest issue that was identified by former David Webb, ex-HKEx Board Member, with the auction was how easily it was to be manipulated due to the lack of random timing as experience in places like Australia and the UK suggested. The fall back position for the HKEx will be to a system that also lacks random timing to prevent easy manipulation.

And the previous policy introduction would have decreased the opportunity for insider trading but was blocked by lobbying by the tycoons. But again one of the major problems here was something mentioned by David Webb in his resignation letter from the HKEx Board, the lack of transparency in the discussions between the HKEx and outside parties like the HK SAR government and tycoons lobbying it.

How's a crooked tycoon supposed to make easy money if you put in to place competition laws and a fully open and transparent stock exchange without manipulation and insider trading and laws that protect labourers from being exploited?

HSBC plunges during closing auction yesterday (though it seems to be miraculously recovering this morning *wink wink*)

Several brokers said the drop in the closing-auction period was because of a sell order of almost 12 million shares executed at HK$33 in the last few seconds of trading. "This is more concrete evidence the big brokers are using the auction period to manipulate the market," Fulbright Securities general manager Francis Lun Sheung-nim said. "They artificially pushed down the Hang Seng Index by more than 200 points."

And if you expect the Securities and Futures Commission or the government controlled HKEx to break up this rigged game that makes easy bank for their tycoons, you might expect the ICAC to seriously investigate the shenanigans of Li Ka-shing's family as well. Government of the tycoons, for the tycoons and by the tycoons shall not perish from this earth (as long as they're pumping up the CCP's Foreign Direct Investment numbers).

I seldom open my feedreader anymore. And when I do, I really only focus on reading Tech blogs and some US political blogs. I've given up for the most part of China blogs. Why? Because every time I open up those feeds I start seeing moronic crap like "our client bought some nifty doo-hicky in China, so trade with China is complex". Any word on whether your client could have sourced or tried to source the doo-hicky elsewhere? Any word on what the advantage to your client sourcing in China might be? (a government that sells out their labour and provides large export subsidies to dump their products on foreign markets instead of their anemic domestic market while desperately pleading for others to believe in "free trade"?) Nah. That would require complex thinking instead of rationalisations of bad behaviour and you just won't find that in the China blogosphere.

As for us all just getting along, it's a bad sign that anyone can suggest that about the PRC with a straight face while the CCP is using helicopters and massive police and paramilitary presence to stifle open dissent in the capitol while "Congress" is meeting and putting a show of force on in Tibet that is closer to the military occupation of Baghdad than Bratton in South Central. Thank goodness for autonomic reflexes, because otherwise these people would be too stupid to breathe.

The next time the Hong Kong Monetary Authority intervenes in the forex markets to defend the peg of the Hong Kong dollar, I'll snicker at folks who suggest that a lack of a black market between the mainland renminbi and the Hong Kong dollar is a sign that there is no currency manipulation underway in this neighbourhood.

So at the APEC meeting the HK SAR Chief Executive and other global leaders spewed words about the need for "Free Trade". They warned against high tariffs and other impediments to the movement of cross-border goods. What they really were saying is that they worried that the US might make it tougher for foreign and multnational companies to prey upon the US consumer market.

This is evidenced by the same HK SAR Chief Executive failing to ask Zhongnanhai to remove/reduce the trade barriers between the HK SAR and the mainland. Instead we get the same old nonsense of an increase in mainland tourists being herded around on the buses of the lazy-ass local tour organisers, who are looking for kickbacks from the property tycoons in the CE's rolodex as compensation for parking the tour buses at the tycoons' excess capacity malls.

Meanwhile the story continues of the local police and authorities arresting new groups weekly for smuggling. The predominant feature in these weekly stories are the items being smuggled: digital cameras, computer hard disks and mobile phones. From what I've been told, you have a much better chance of winning in Macau and Las Vegas than finding a non-smuggled hard drive on the mainland. Why? The mainland wants these businesses to relocate from their existing manufacturing bases in Asia (Japan, Korea, Taiwan, Malaysia) to the mainland as part of their upgrading technology manufacturing. The quickest way of doing that is high tariffs. Ask the original architect of the US economy, Alexander Hamilton. Any American history buffs that can tell the readers about the Tariff of Abominations and the ensuing Nullification Crisis? Did Hamilton's plan work? Up until Reagan and 1980, when the neo-conservative branch of the Republican Party dismantled the program and destroyed the greatest economy on Earth with government debt on non-productive assets, trade debt on non-productive assets and consumer debt.

On that same note, the WTO finally ruled against China on illegal trade tariffs on auto parts. The notional reason for implementing the high tariffs was so foreign companies wouldn't import whole cars as parts in order to avoid the high tariffs on full cars. Understand? Zhongnanhai wanted auto manufacturers and the whole auto parts supply chain to move their production to the mainland and the method to achieve this was high tariffs. It worked. Most commentary on the WTO decision say it's too late to make any difference as Zhongnanhai has effectively accomplished their goal.

So the next time the HK SAR CE or The Bigen Hair Dye crew from Zhongnanhai talk about China being committed to free trade, laugh at them for talking nonsense. And when their useful idiot English-language bloggers start blabbing about China being committed a free market now committed to free trade, laugh at them for having completely lost perspective and being "glamoured" by the myth of the billion person Chinese market. (Hey, ATV how's that access to the Chinese market via landing privileges working out for ya?).