For a country that insists it operates a market economy, China is finding it remarkably hard to accept that the laws of supply and demand also apply to raw materials and energy. Last month, its hard-nosed efforts to thwart an increase in the price of iron ore suffered a humiliating defeat. It is now committing a similar blunder over liquefied natural gas imports.

In the first case, China's mistake was to assume, bizarrely, that its role as the world's biggest consumer of iron ore somehow gives it the upper hand over producers, when it is actually competing in a sellers' market in which its own voracious demand has sent prices soaring. In contrast, it is still a relatively small buyer of LNG, but seems to believe the long-term potential of its national market entitles it to special concessions from foreign suppliers.