The global recession didn't make a dent in the dominance of Chinese products in the global market. According to a column (in Chinese only) on the Chinese Web site of the Wall Street Journal, however, Chinese exports are still in a "miserable" situation.

The author, Liu Gang, defined the "misery" as an extracting but unrewarding task.

On the surface, he said, the Chinese government subsidizes Chinese manufacturers to sell products at lower prices in overseas markets than in the domestic market. Ultimately, it is foreign consumers that Beijing really is subsidizing, while domestic Chinese consumers are charged premium prices for the same products.

"We use our money to subsidize foreign consumers and still get criticized by them, why both?" Liu was quick to answer his own question: "The only benefit is domestic jobs."

Then, why doesn't China replace these export-focused jobs with positions that serve the domestic market? The reasoning usually stops at an ostensible statement: domestic demand is still limited.

Is that really so?

Beijing, as I see it, has been making efforts to boost domestic consumption, by providing subsidies to auto and appliances purchases, for instance.

But the best way to bolster Chinese purchasing power is to reduce the non-manufacturing costs associated with an inefficient distribution/retail system and the lack of trust and credibility.

Why would shrewd Chinese factories export their products for razor-thin profit, when the same products are sold for significantly higher prices in the home market? Because it's a headache to get paid by domestic buyers, companies have told me over and over.

Liu called for the government to take real action to reduce distribution costs and restore business credibility and trust. He even suggested using export subsidies to vouch for domestic payments. That way, he said, made-in-China products will be able increase sales within China, rather than suffering low margin and getting scolded overseas.