Can the United States win against ‘Made in China 2025’?
The Chinese government is putting the full weight of its power behind the Made in China 2025 initiative to dominate global high-tech manufacturing. The initiative was first announced in 2015 and is now picking up full steam. Can the US and other countries compete against the communist country’s efforts to compete against our free markets?
The Council on Foreign Relations’s (CFR) article Is ‘Made in China 2025’ a Threat to Global Trade? covers this in great detail saying:
China 2025 reflects Beijing’s longstanding development goals. Since the market reforms of leader Deng Xiaoping in the 1980s, the ruling Chinese Communist Party (CCP) has pursued a mixed economy that combines socialist planning with elements of private enterprise.
In recent decades, the CCP has taken steps to shift the economy away from resource extraction and low value–added, low wage manufacturing—largely mining, energy, and consumer goods such as clothing and footwear, which make up almost half of the country’s economy—to a high-tech, high-productivity economy. China 2025 is intended to push the economy through this difficult transition and over the so-called middle-income trap, in which growth plateaus as wages start to rise, that has bedeviled many other developing countries.
What does this cover?
Chief among these are electric cars and other new energy vehicles, next-generation information technology (IT) and telecommunications, and advanced robotics and artificial intelligence. Chief among these are electric cars and other new energy vehicles, next-generation information technology (IT) and telecommunications, and advanced robotics and artificial intelligence…
Could this be good for the US?
Yes and no. It is generally good for the US and other developed countries when new markets open up and the people in those countries become more wealthy. This is because they are able to buy more goods overall, and in a free market, that means that some of those goods will be purchased from other countries.
“China aims to achieve 70 percent “self-sufficiency” in high-tech industries” would be a good thing. The Chinese (communist) government’s goal of creating a dominant position in global markets by 2049 is a concern.
For the United States and other major industrialized democracies, however, these tactics not only undermine Beijing’s stated adherence to international trade rules but also pose a security risk.
The Chinese government does not provide a free market and has been shown multiple times to create barriers to foreign companies trying to reach the Chinese.
Potential negative effect on global poverty.
We would love to see more of the Chinese people lifted out of poverty but only if there is an equal opportunity for everyone in the world in similar situations.
Capitalism lifts people out of poverty. The number of people living in extreme poverty worldwide declined by 80 percent from 1970 to 2006. Poverty worldwide included 94 percent of the world’s population in 1820. In 2011, it was only 17 percent. It’s an incredible shift that doesn’t receive a lot of media coverage because it highlights the success of capitalism.
As Arthur Brooks said in a 2012 speech, “It was globalization, free trade, the boom in international entrepreneurship.” “In short, it was the free enterprise system, American style, which is our gift to the world.”
The Foundation for Economic Education’s (FEE) Steven Horwtiz points out “The competitive market process has also made education, art, and culture available to more and more people,”. “Even the poorest of Americans, not to mention many of the global poor, have access through the Internet and TV to concerts, books, and works of art that were exclusively the province of the wealthy for centuries.”
However, the Chinese government does not support free trade or provide an equal opportunities for the rest of the world. As one of the top 3 economies in the world, it’s not only not fair but could drastically slow down the improvements for those still living in poverty around the world.
More broadly, policymakers worry that China’s state-led model and its ambition to control entire supply chains—for instance, the cobalt industry, which powers most modern electronics—means that entire industries could come under control of a rival geopolitical power. A June 2018 White House report warned that [PDF] China’s economic moves threaten “not only the U.S. economy but also the global innovation system as a whole.”
Can the US compete? How should the US and other countries respond? We want to hear your thoughts below.