Countering Chinese Industrial Policy Is Counterproductive
The United States’ real business-related challenge vis-à-vis China is the tradeoff between national security and the benefits of economic exchange, not China’s support for state-owned firms or its industrial subsidies. And the worst thing America could do is to enact industrial policies of its own.
CHICAGO – US political leaders have long tried to counter Chinese industrial policy. And now they seem to have decided that the best way to do that is to emulate it. But their agenda betrays a profound lack of understanding of the unique challenge posed by China’s coupling of an authoritarian political regime with a dynamic market economy.