[SS from essay by Aaron L. Friedberg, Professor at Princeton University and a Nonresident Senior Fellow at the American Enterprise Institute.]
According to the theories of economics and trade that are prevalent in the West, Chinese leader [Xi Jinping](https://www.foreignaffairs.com/tags/xi-jinping) has little choice but to pull back: China’s economy has become dangerously imbalanced. In 2022, according to the World Bank, the country accounted for 30 percent of global manufacturing value added but only 13 percent of global consumption. But it is a mistake to presume that Xi and the Chinese Communist Party (CCP) think about the Chinese economy the same way Western economists do. The key to understanding Xi’s economic policies is to recognize that they are principally about power, not prosperity. He will almost certainly forge ahead toward concentrating the world’s industrial power within China, even at the risk of provoking a cataclysmic trade conflict with other countries.
Doing this will absolutely lock in inflation for decades and reduce living standards in the trade coalition. Will people be willing to pay sometimes even multiple times more to give governments what they want? I don’t necessarily see it being popular.
We’re already seeing this now with electric vehicles. Cars built to basically the same standards as European cars are often more than 50% cheaper in China than when they get exported. Doing this with every possible item would be painful to say the least.
What specific rules did China break wrt the WTO? Do these warrant explicitly breaking a WTO rule throughout the top 15 economies?
I’m just looking for knowledge and sources, not here to debate this. Was just curious about the proposition noted in the article.
3 comments
[SS from essay by Aaron L. Friedberg, Professor at Princeton University and a Nonresident Senior Fellow at the American Enterprise Institute.]
According to the theories of economics and trade that are prevalent in the West, Chinese leader [Xi Jinping](https://www.foreignaffairs.com/tags/xi-jinping) has little choice but to pull back: China’s economy has become dangerously imbalanced. In 2022, according to the World Bank, the country accounted for 30 percent of global manufacturing value added but only 13 percent of global consumption. But it is a mistake to presume that Xi and the Chinese Communist Party (CCP) think about the Chinese economy the same way Western economists do. The key to understanding Xi’s economic policies is to recognize that they are principally about power, not prosperity. He will almost certainly forge ahead toward concentrating the world’s industrial power within China, even at the risk of provoking a cataclysmic trade conflict with other countries.
Doing this will absolutely lock in inflation for decades and reduce living standards in the trade coalition. Will people be willing to pay sometimes even multiple times more to give governments what they want? I don’t necessarily see it being popular.
We’re already seeing this now with electric vehicles. Cars built to basically the same standards as European cars are often more than 50% cheaper in China than when they get exported. Doing this with every possible item would be painful to say the least.
What specific rules did China break wrt the WTO? Do these warrant explicitly breaking a WTO rule throughout the top 15 economies?
I’m just looking for knowledge and sources, not here to debate this. Was just curious about the proposition noted in the article.