Talking past each other on trade

In A Sino-U.S. financial war?, I discussed how the Chinese articles were almost completely different from the Western articles on the Unionpay-Visa dispute.

Michael Pettis notices the same thing in couple of articles about China and its role in the global economy. Pettis' article is worth reading in and of itself, on potential deregulation of deposit rates in China, which he has argued is important for personal consumption rates.

The two articles are:

China is Still a Renegade Nation

and

China's yuan on long gaining streak

The conclusion to the former article is the increasingly popular argument that protectionism favors the deficit countries. Surplus countries are the ones benefiting from free trade, so it stands to reason that they will see a larger drop in business if the economy weakens or barriers are erected to slow or block trade. Exhibit A is the United States during the Great Depression.

The second article discusses China's efforts to keep the global economy humming, including increasing flexibility with the currency.

Protectionism becomes much easier when the two sides are talking past each other.