This is Part II of a rant I started yesterday in response to a an editorial written by Addison Wiggin of Agora Financial.

I think any suggestion that businesses are moving to China because of U.S. policy is a farcical dream of conservatives who drank too much zippy juice before retiring for the evening. But I do need to bring up one final topic.

After his discussion of Farr’s comments on how the U.S. is going to hell, Wiggin slides into a recitation of China growth stats. This is always a sure way to get your would-be customers excited. The implication here, of course, is that this growth is directly attributable to pro-business policies. For some reason, however, Wiggin stops with the growth statistics and never mentions what those pro-business policies are.

Wiggin could have mentioned China’s legal reform since joining the WTO. He could have talked about progress on intellectual property rights protection. He could have discussed institution building or financial reform or any number of things. I suspect, though, that Wiggin is not up to speed on those issues. His hero Farr, who apparently ran Emerson’s Asia-Pac division for several years, doesn’t even understand U.S. policy, let alone what’s going on in China at the moment.

Wiggin certainly doesn’t want to mention the downside of China investment and Beijing’s revamped industrial policy, which was the subject of a post I wrote yesterday. That would seriously undermine his (and Farr’s) argument that China is a business paradise, compared to the Marxist hell that is the United States.

At the end of the day, though, Wiggin is simply flogging new products and trying to make a buck:

David Farr and other American CEOs find emerging markets a friendlier place to do business. And if American blue chips get a good reception, imagine how well the homegrown companies are treated.

That’s the idea behind a fairly new exchange-traded fund (ETF) with a mouthful of a name: The Dow Jones Emerging Markets Composite Titans Index Fund (EEG).

Two points. First, anyone who says that American companies these days are getting “a good reception” in China are blowing smoke up your ass. That is not to say that they are being treated unfairly, at least not all of the time, but the red carpet that used to be rolled out for American blue chips has been rolled back up and stowed away in a closet somewhere at the Ministry of Commerce. They still bring it out once in a while, but only when a visiting African or Middle Eastern dignitary is in town to sign a commodities deal. American companies can do well in China, but these days they have to fight for it.

Second, the other emerging markets Wiggin touts as pro-business include Russia, India, and Brazil. I’m no expert on FDI in those countries, but I seriously doubt that anyone finds it easier doing business in a place like India than the United States. The assertion is absurd on its face.

I’ve been assisting American companies to set up in China since 1999. They used to come here to set up export companies, taking advantage of low costs. These days, they set up to sell to the Chinese market, or perhaps take advantage of the lower labor costs in certain areas (e.g., engineers, researchers, programmers). They don’t come to China because of cap and trade, or the health care bill, or because they just think China’s labor and tax laws are fine and dandy.

The fund that Wiggin is talking up sounds fine. I have no doubt that Chinese State-owned Enterprises, at least, will do well over the next few years. However, this has everything to do with China’s industrial policy and growth rate, and nothing to do with the “pro-business” climate here. In fact, arguably most SOEs do well in certain sectors as the result of protectionism/government involvement, exactly the opposite of Wiggin’s contention! Wiggin seems to be arguing that night is day and black is white. He is a confused man.

As a rule, I dislike conservative ideologues who play fast and loose with the facts. When they do so with respect to China foreign investment issues, well, that’s like waving a red flag in front of my face.

Rant over.