China Report: What’s up with all of Biden’s executive orders on China?

The TL;DR here: The US and China trusted each other on industrial cooperation and trade despite ideological differences. But now, I think both sides will agree, that kind of trust doesn’t seem realistic anymore. These orders aim to move industries that have migrated from the US to the States. (You can read more about how the pandemic has highlighted this issue here.)

Despite this growing suspicion, these new policies follow the same playbook China has used for decades: generous industry subsidies, government funding for academic institutions, and entry barriers for foreign competitors to protect domestic companies. And it might just work! After all, it was the Chinese government’s success in growing key technology sectors in short periods of time that prompted the US to act in the first place.

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Whether the government admits it or not, I think these moves to build domestic industries are a form of protectionism. This reminds me of the term “economic nationalism” used by New York writer E. Tammy Kim to describe how candidates from both parties in the Ohio Senate campaign pledged to bring manufacturing jobs back from China. I don’t think it’s a bad thing when the government steps in to help a local industry. But economic nationalism also brings problems: unfair competition, corruption, xenophobia, rejection of trading partners, etc. Biden will certainly be challenged on these issues by both sides.

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I find it ironic that after years of criticizing the Chinese approach to developing domestic tech industries, the US – under both Trump and Biden – is also learning from China. But to be fair, the best path to technological advancement is probably halfway between over-the-top government intervention and an unregulated free market. It will be interesting to see how the US manages this balance compared to its rival.

Have a different take on the Biden admin’s executive orders on China? I would love to hear from you below [email protected].

Catch up with China

1. A car crash in Guizhou killed 27 people being transported to a Covid quarantine facility. It sparked widespread online outrage over China’s ongoing zero-Covid policy. (CNN)

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2. Although individual Chinese users have been banned from Twitter, local governments there pay for tourism ads — and they’ve become a fast-growing revenue stream for the platform. (Reuters$)

3. Store owners in Mexico resell the Shein clothes they bought online and make a fortune from it. (Rest of the world)

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