China Report: What’s Wrong With All Biden’s China Executive Orders?

TL;DR here: The US and China trusted each other in industrial cooperation and trade despite ideological differences. But now, I think both sides will agree that such trust no longer seems realistic. These orders are aimed at moving industries that have emigrated from the US back to the states. (Here you can read more about how the pandemic has highlighted this issue.)

Despite growing distrust, this new policy follows the same pattern China has used for decades: generous industry subsidies, public funding for academic institutions, and barriers to entry for foreign competitors to protect domestic companies. And it just might work! After all, it was the Chinese government’s success in developing key technology sectors in short periods of time that spurred the US into action in the first place.

Whether the administration admits it or not, I think these moves to create a domestic industry are a form of protectionism. This reminds me of the term “economic nationalism,” which New Yorker writer E. Tammy Kim used to describe how bipartisan candidates in the Ohio Senate race vowed to bring back manufacturing jobs from China. I don’t think that a government intervening in helping domestic industry is a bad thing in itself. But economic nationalism also has problems: unfair competition, corruption, xenophobia, abandonment of trade allies, and so on. On these issues, Biden will undoubtedly be opposed by both sides.

It seems ironic to me that after years of criticizing the Chinese approach to developing domestic tech industries, the United States—under Trump and Biden—is also learning from China. But frankly, the best way to make technological progress is probably halfway between excessive government intervention and an unregulated free market. It will be interesting to see how the US handles this balance against its rival.

Do you have a different opinion on Administrator Biden’s China executive orders? I would like to hear from you [email protected].

Catch up with China

1. A car accident in Guizhou killed 27 people who were taken to quarantine. This sparked widespread online outrage over China’s ongoing anti-coronavirus policy. (CNN)

2. Even though some Chinese users have been banned from Twitter, local governments pay for travel ads – and they have become a rapidly growing source of income for the platform. (Reuters $)

3. Store owners in Mexico resell Shein clothes they bought online and cash in on it. (The rest of the world)

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