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Published: Sunday, 2/26/2006

The China factor in Vitamin C

A nation that hungers for imported oil and low-priced consumer goods from all over the world, but especially China in recent years, now has a new commodity to worry about, that favorite cold preventative or remedy, Vitamin C.

It turns out that more than 85 percent of the Vitamin C sold in this country comes from China, and like cartels or monopolies the world over, the four major producers of the vitamin product in China have an agreement to fix prices. After that agreement in 2001, the price of Vitamin C by the kilogram tripled from about $3 to $9, according to a Wall Street Journal story.

China, it has long been obvious, plays by the rules of international trade only when it suits that country. Cooperation to set prices is contrary to U.S. law, and several civil antitrust suits have been filed against Chinese manufacturers. Federal prosecutors, too, are looking into the matter.

The problem is that as China becomes a bigger player in the world market, its power to set prices increases accordingly, and it is quite likely that that power will grow over a number of products, especially if China is, as seems likely, able to become the dominant player in that field.

The price of Vitamin C may seem a trifle, as compared with the ability of U.S. pharmaceutical firms to maintain high prices for U.S. consumers, while selling the same drugs at more competitive prices to foreign countries.

That's the reason many U.S. consumers complain about efforts by the government and the pharmaceutical companies to limit their ability to buy expensive drugs north of the border.

The situation could get worse in the burgeoning U.S.-China trade. The willingness of Google, the highly successful computer search engine, to bow to Chinese demands for censorship of certain subjects as Google expands to China, shows that U.S. manufacturers are willing to kowtow to Beijing's whims.

Washington may not be of much help, as this country turns to the Chinese market to finance the one commodity which is in seemingly endless supply in the United States: our national debt, now well over $8 trillion.

In fact, the flourishing U.S. intellectual-property market could be threatened as the Chinese become more clever at turning out knockoffs of American products. In short, pass the aspirin - American-made, if that's not asking too much.

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