Thursday, January 2, 2020

The Economist - China’s industrial policy has worked better than critics think

But the state-led model is creaking

Not creaking anything like the Western system, though.

I can't read it all because it's behind a paywall, but I've read before how the Chinese government instructs its private companies. For instance, it told them to invest long-term into 5G technology, which has paid off handsomely.. 

But according to the neoclassical economists, it's best governments keep out of the market. Look where that got us! 

Early in its trade dispute with China, America declared that Chinese industrial policy was a form of “economic aggression”. America’s negotiators hoped to rein it in. No such luck. The very week in December that America and China announced a mini-deal on trade, China’s president, Xi Jinping, vowed that the Chinese government would do more in 2020 to support strategic sectors, ranging from robotics to biomedicine. Having seen its vulnerability to American export controls, China is more determined to build up its domestic abilities than it was before the trade war began.

The Economist 

1 comment:

Peter Pan said...

Meanwhile, US defense contractors are forced to make do with chop suey...