Hack, gag and sputter for just a bit longer!

Not to be on the overly graphic side of things, but when I blow my nose, should the tissue there after look like a Rorschach Test? It is undeniable that there are massive pollution problems in China, not the least of which being the air quality issues. Yet, the Chinese government continues to pay lip service to the issue. Case in point, a good piece of journalism by Kandy Wong in Monday's business section of the South China Morning Post. (Unfortunately, the SCMP is a subscriber service, so the article is inaccessible unless you buck up some dough) But the crux of the article essentially says that a government advisor has told the automobile industry that this country is, yet again, going to delay implementing the fuel tax it has been humming and hawing about for over a decade. The rationale is that, because the price of oil is so high right now, it would not 'be in China's best interest' to institute this additional burden on the drivers at this time. The same article also points out that sales of more fuel-efficient vehicles in this country is on the decline!

So why is the government really delaying the fuel tax? Of course oil prices are high right now. But virtually every economist you talk with will tell you that oil prices are going to remain high. The days of a 20 dollar barrel of oil are long behind us. Yet, this government refuses to acknowledge this issue and deal with it. I submit that there are two factors behind this foot dragging. One: Domestic consumption of vehicles is on an unabashed pace. And this government has to mommy-coddle any sector of the economy that stimulates domestic spending. Two: Inflation. Despite what you may or may not hear about how well China is doing on keeping inflation in check, I have come to the conclusion that this issue is of significant concern within the walls of Zhongnanhai. Food prices are on the rise. And if you tack on a fuel price hike to this scenario, it may just be the catalyst for an inflationary snowball effect.

As much as Beijing will put on a 'Green Olympics,' don't for a minute believe that economic stability is going to take a back seat to giving Mother Earth a helping hand. Time to invest in a Michael Jackson mask!

Oh, and by the way, if you think the pollution is going to get better in China anytime soon, just read the latest report from the International Energy Agency and decide for yourself!