The Economics Show What does the US get wrong about China? With Adam Posen
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Jul 22, 2024 Adam Posen, President of the Peterson Institute for International Economics, discusses the US's tough stance on China. Topics include China's economic shift under President Xi, US misconceptions about manufacturing, unilateralism in economic policies, proposed changes in US policy towards China, and counterarguments to views on China's economic behavior and national security.
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Xi's Shift Dampened Growth
- Since 2015, under Xi Jinping, China shifted from market empowerment to increased state and party control.
- This shift, combined with COVID crackdowns, made Chinese citizens wary, reducing their economic engagement and investment sensitivity to government stimulus.
China's Strategic Industry Edge
- China's heavy state subsidies in sectors like solar panels led to losses despite dominating production.
- The electric vehicle industry is more competitive due to innovation, posing complex challenges to Western markets.
Biden's Hawkish China Stance
- The Biden administration shares Trump's view of China as an economic and national security threat, stressing countermeasures.
- However, Adam Posen sees this approach as overly anxious and aggressive, risking missteps in response strategy.