China shock 2 is based on the same fallacy as 1, zero sum game. As the belt and road and East Asian and BRICS development show growing exchange opens more opportunity for domestic economies prepared to compete. Flying Geese is being validated by global pattern of development. This postulates that exchange between higher and lower productivity countries gradually and stepwise diffuses increasing and demand and technology level, which state capacity can enhance or degrade but cannot greatly depart from in acceleration. It was never defined as a queue or automatic. The reason the china shock has no prescription but only moral judgment is because that is its purpose, to tarnish the reputation of china to slow the thinking of learning from china’s experience and bolster confidence in the American strategy of aggressive mercantile bloc. The latter is tangential from the root problem of industrial obsolescence in the advanced countries, which is fundamentally imbalanced automation and obsolete offering. On akamatsu’s ladder one steps up or is stepped on.
Great post. Very interesting and helpful read. And, yes, much of western countries' ceding of their markets for low wage goods was motivated by the need to maintain empire. Also true is that ceding these markets to Japan, Taiwan, Mexico, South Korea, and then China, was also intended to gut the power of labor in the imperial center. My hometown of Milwaukee, once the machine tool capital of the world, has never recovered. Ditto for the rest of the industrial Midwest.
Thanks for your excellent arguments. I should point out those who’re concerned about developing countries are robbed the opportunities by China. First of all, China has made many infrastructure investments in Arica and B&R countries that are foundational for economic development. Chinese companies, SOEs and private companies alike, are building factories around the world. BYD, for example, is building highly localized plants in Thailand and Brazil. Secondly, China was never “given” the opportunities to develop. China negotiated, fought its way to develop. It’s healthy to strive in competition. Lastly, if you’re so concerned, what have you done for developing countries besides pointing fingers at China?
Thank you for pointing out how China is benefiting the developing world through the sale of industrial machinery.
However, at this point China needs to recognize that it is indeed the elephant in the room. No other country, the United States included, can make an economic decision without reckoning with the impact of the Chinese economy on that decision. China is now in the position that the United States was in 1945. At that point, Americans quickly acquired the nickname, “the Ugly American,” because they did not take into account the impact of American power on every other country in the world. China is already in economic terms a hegemonic or near hegemonic authority. It is developing a military Power that nearly Equals American military power.
Does China want its representatives to become known as, "the ugly Chinese? "
All articles coming from the USA seem to have one of the classic US problems - they tend to see or explain in simple black and white, the good and the bad, white hat cowboy and black hat cowboy. After the end of the cold war the US were desperately seeking a new enemy and finally found it in China. This anti-China bias permeates all levels, that's why this post should be a "must read" for every American.
We westeners have to face our decline and start doing something about it instead of pointing only to the usual scapegoat, raising custom duties to protect ourselves and falsely claiming China is doing everything just to hurt us. In reality they have their own problems and simply ,understandably, don't care about ours
I agree with you yeah in many respects, but I'd like to express two reservations. First of all, we found our post Cold war enemy with a ferocious zeal in 2001 when we went after Islamic extremism. Of course, by the withdraw or withdrawal for my Afghanistan in 20 21, we had gotten quite tired of that enemy. But I agree that China has replaced Islamic terrorism as the focus of American xenophobia.
Second of all, my major point is that the major powers of the world, whether they are the USA or China or the EU, would be wise to worry about the problems of others.
Those who live in and act in blissful indifference to their environment arouse enmities of which they are not aware.
Mostly agree with the article. I would point out, though, that the policy of China that is being accused of hurting the global south actually hurts Chinese citizens. Overindexing on low-productivity sectors via subsidies, tariffs, and fixed low exchange rates is coming at the expense of the Chinese consumer's purchasing power.
cus deep inside the OP is a closeted MAGA spreading fallacies to induce internal chaos within the Chinese communities, akin to 八國聯軍...which will not succeed this time, because *laughs the entirety of "Western gov" IQ*
Hmm. I think you forgot the part about the CCP subsidizing certain industries in order for them to be able to sell below actual cost of production, therefore driving non china, non subsidized competitors out of business. So yes, they are pulling up the ladder.
Good read. Isn’t there a more narrow argument that by maintaining a low exchange rate, China is both harming other exporters but also its own consumers? That depreciated currency also reduces Chinese purchasing power for international goods.
Excellent essay pushing back against the newly manufactured narrative coming out of American think tanks and Washington policy circles: the claim that China is “pulling up the ladder” behind it and blocking the Global South’s path to industrialization.
This argument is part of a larger story now being packaged as the China Squeeze. It turns a hard development problem into a morality play: China has stayed too long, grown too large and exported too much, leaving poorer countries trapped beneath it.
Countries that organized themselves around Chinese demand and Chinese supply chains often found more concrete development opportunities. Countries that treated China primarily as a threat, and tried to bypass it through protectionism or geopolitical rents, did not automatically build stronger manufacturing systems.
The future of the Global South will not be determined by whether China voluntarily gives up industrial space. It will be determined by which countries can turn external competition into internal capacity.
China does not need to pull every country into its industrial network. The countries willing to cooperate — and capable of turning that cooperation into development — are already entering the system. The others are free to find their own path.
I think China could look at implementing a kind of Bancor mechanism that Keynes envisaged, so that it does not keep accumulating long run trade surpluses, and give other developing countries room to grow their own domestic industrial capacity.
Strong critique of the ‘queue’ model. One China-specific extension is that industrial advantage increasingly sits in systems, not isolated products: supplier density, tooling, standards, logistics, financing, and fast engineering iteration. Those capabilities are cumulative and transferable across sectors, which helps explain why rising wages have not forced a simple handoff. For late industrializers, the more useful question may be how to use Chinese capital goods and production networks to build local capabilities without settling into permanent dependence.
Whatever China's or other policies, progress in automation means the traditional entry point for poor country (cheap labour) becomes increasingly difficult - you must compete with increasingly self-sufficient robotic production lines.
The entry point may even close completely at some point, who knows if it is now with China, in a couple decades after India takes off, or Africa will get a shot.
On the other hand if robots make everything then poverty anywhere in the world will become a purely political choice.
You can enjoy the spectacle of "experts" stoking fear and hostility for a living though, if you are so minded, or the sour former-alpha, butthurt new-beta raging, if that's what you're into. Not very healthy though. We hope the US empire will go with grace like the British, not in ugly criminal delusion like the Russian.
China shock 2 is based on the same fallacy as 1, zero sum game. As the belt and road and East Asian and BRICS development show growing exchange opens more opportunity for domestic economies prepared to compete. Flying Geese is being validated by global pattern of development. This postulates that exchange between higher and lower productivity countries gradually and stepwise diffuses increasing and demand and technology level, which state capacity can enhance or degrade but cannot greatly depart from in acceleration. It was never defined as a queue or automatic. The reason the china shock has no prescription but only moral judgment is because that is its purpose, to tarnish the reputation of china to slow the thinking of learning from china’s experience and bolster confidence in the American strategy of aggressive mercantile bloc. The latter is tangential from the root problem of industrial obsolescence in the advanced countries, which is fundamentally imbalanced automation and obsolete offering. On akamatsu’s ladder one steps up or is stepped on.
Great post. Very interesting and helpful read. And, yes, much of western countries' ceding of their markets for low wage goods was motivated by the need to maintain empire. Also true is that ceding these markets to Japan, Taiwan, Mexico, South Korea, and then China, was also intended to gut the power of labor in the imperial center. My hometown of Milwaukee, once the machine tool capital of the world, has never recovered. Ditto for the rest of the industrial Midwest.
Thanks for your excellent arguments. I should point out those who’re concerned about developing countries are robbed the opportunities by China. First of all, China has made many infrastructure investments in Arica and B&R countries that are foundational for economic development. Chinese companies, SOEs and private companies alike, are building factories around the world. BYD, for example, is building highly localized plants in Thailand and Brazil. Secondly, China was never “given” the opportunities to develop. China negotiated, fought its way to develop. It’s healthy to strive in competition. Lastly, if you’re so concerned, what have you done for developing countries besides pointing fingers at China?
Thank you for pointing out how China is benefiting the developing world through the sale of industrial machinery.
However, at this point China needs to recognize that it is indeed the elephant in the room. No other country, the United States included, can make an economic decision without reckoning with the impact of the Chinese economy on that decision. China is now in the position that the United States was in 1945. At that point, Americans quickly acquired the nickname, “the Ugly American,” because they did not take into account the impact of American power on every other country in the world. China is already in economic terms a hegemonic or near hegemonic authority. It is developing a military Power that nearly Equals American military power.
Does China want its representatives to become known as, "the ugly Chinese? "
All articles coming from the USA seem to have one of the classic US problems - they tend to see or explain in simple black and white, the good and the bad, white hat cowboy and black hat cowboy. After the end of the cold war the US were desperately seeking a new enemy and finally found it in China. This anti-China bias permeates all levels, that's why this post should be a "must read" for every American.
We westeners have to face our decline and start doing something about it instead of pointing only to the usual scapegoat, raising custom duties to protect ourselves and falsely claiming China is doing everything just to hurt us. In reality they have their own problems and simply ,understandably, don't care about ours
I agree with you yeah in many respects, but I'd like to express two reservations. First of all, we found our post Cold war enemy with a ferocious zeal in 2001 when we went after Islamic extremism. Of course, by the withdraw or withdrawal for my Afghanistan in 20 21, we had gotten quite tired of that enemy. But I agree that China has replaced Islamic terrorism as the focus of American xenophobia.
Second of all, my major point is that the major powers of the world, whether they are the USA or China or the EU, would be wise to worry about the problems of others.
Those who live in and act in blissful indifference to their environment arouse enmities of which they are not aware.
Mostly agree with the article. I would point out, though, that the policy of China that is being accused of hurting the global south actually hurts Chinese citizens. Overindexing on low-productivity sectors via subsidies, tariffs, and fixed low exchange rates is coming at the expense of the Chinese consumer's purchasing power.
cus deep inside the OP is a closeted MAGA spreading fallacies to induce internal chaos within the Chinese communities, akin to 八國聯軍...which will not succeed this time, because *laughs the entirety of "Western gov" IQ*
Hmm. I think you forgot the part about the CCP subsidizing certain industries in order for them to be able to sell below actual cost of production, therefore driving non china, non subsidized competitors out of business. So yes, they are pulling up the ladder.
Good read. Isn’t there a more narrow argument that by maintaining a low exchange rate, China is both harming other exporters but also its own consumers? That depreciated currency also reduces Chinese purchasing power for international goods.
Excellent essay pushing back against the newly manufactured narrative coming out of American think tanks and Washington policy circles: the claim that China is “pulling up the ladder” behind it and blocking the Global South’s path to industrialization.
This argument is part of a larger story now being packaged as the China Squeeze. It turns a hard development problem into a morality play: China has stayed too long, grown too large and exported too much, leaving poorer countries trapped beneath it.
Countries that organized themselves around Chinese demand and Chinese supply chains often found more concrete development opportunities. Countries that treated China primarily as a threat, and tried to bypass it through protectionism or geopolitical rents, did not automatically build stronger manufacturing systems.
The future of the Global South will not be determined by whether China voluntarily gives up industrial space. It will be determined by which countries can turn external competition into internal capacity.
China does not need to pull every country into its industrial network. The countries willing to cooperate — and capable of turning that cooperation into development — are already entering the system. The others are free to find their own path.
I think China could look at implementing a kind of Bancor mechanism that Keynes envisaged, so that it does not keep accumulating long run trade surpluses, and give other developing countries room to grow their own domestic industrial capacity.
Strong critique of the ‘queue’ model. One China-specific extension is that industrial advantage increasingly sits in systems, not isolated products: supplier density, tooling, standards, logistics, financing, and fast engineering iteration. Those capabilities are cumulative and transferable across sectors, which helps explain why rising wages have not forced a simple handoff. For late industrializers, the more useful question may be how to use Chinese capital goods and production networks to build local capabilities without settling into permanent dependence.
Whatever China's or other policies, progress in automation means the traditional entry point for poor country (cheap labour) becomes increasingly difficult - you must compete with increasingly self-sufficient robotic production lines.
The entry point may even close completely at some point, who knows if it is now with China, in a couple decades after India takes off, or Africa will get a shot.
On the other hand if robots make everything then poverty anywhere in the world will become a purely political choice.
You can enjoy the spectacle of "experts" stoking fear and hostility for a living though, if you are so minded, or the sour former-alpha, butthurt new-beta raging, if that's what you're into. Not very healthy though. We hope the US empire will go with grace like the British, not in ugly criminal delusion like the Russian.
An article like this by a person that has boots on ground and KNOWS what they’re talking about was much needed.