Mr. Wolf wrote:
The US focus on bilateral imbalances is economically illiterate. The view that theft of intellectual property has caused huge damage to the US is questionable. The proposition that China has grossly violated its commitments under its 2001 accession agreement to the World Trade Organization is hugely exaggerated.
“A landmark study by the MIT economist David Autor attributed the loss of 985,000 manufacturing jobs in the United States from 1999 to 2011, or about 20 percent of the total job losses in the sector during this period, to the so-called China shock of exposure to increased competition from China.” (Source: https://www.theatlantic.com/international/archive/2018/08/china-trump-trade-united-states/567526/)
“When China entered the WTO in 2001, it promised to sign the Government Procurement Agreement, which requires government purchases to be made on a non-discriminatory and transparent basis, “as soon as possible.” Sixteen years later, this has not happened. As a first step, the Trump administration should demand that the Chinese government sign the GPA without further delay. But down the road, the administration may be forced to ask Congress for additional authority. If turning over our technological crown jewels to a foreign power is against the national interest, then our government should have the power to prevent it. But wielding this power without blowing up the international trade regime will not be easy.” (William Galston, Wall Street Journal, 9th August 2017)
“This paper links the sharp drop in U.S. manufacturing employment after 2000 to a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China and higher entry by U.S. importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the EU, where policy did not change.” (Source: ‘The Surprisingly Swift Decline of U.S. Manufacturing Employment’ by Justin R. Pierce and Peter K. Schott – https://www.aeaweb.org/articles?id=10.1257/aer.20131578)
“This paper examines the relationship between county-level mortality rates and exposure to an important economic shock, the trade liberalization associated with the U.S. granting of Permanent Normal Trade Relations to China. We calculate exposure to PNTR as the employment-weighted average exposure of the industries active in each county. We then estimate the relationship between PNTR and mortality using a differences-in-differences framework that nets out any time-invariant county characteristics, as well as annual shocks that affect counties identically. We find that exposure to PNTR is associated with an increase in mortality due to suicide and related causes, particularly among whites. These results are consistent with that group’s relatively high employment in manufacturing, the sector most affected by the change in trade policy. We find that these results are robust to various extensions, including an alternate empirical specification that places no restrictions on the timing of the effects of the policy change as well including controls for changes in state health care policy and exposure of other counties in the surrounding labor market.” (“Trade Liberalization and Mortality: Evidence from U.S. Counties” by Justin Pierce and Peter K. Schott, Federal Reserve Board, November 2016 – https://www.federalreserve.gov/econresdata/feds/2016/files/2016094pap.pdf)
Martin Wolf #2
“the best way for the west to deal with China is to insist on the abiding values of freedom, democracy, rules-based multilateralism and global co-operation. These ideas made many around the globe supporters of the US in the past.”
“This is the most important geopolitical development of our era. Not least, it will increasingly force everybody else to take sides or fight hard for neutrality. But it is not only important. It is dangerous. It risks turning a manageable, albeit vexed, relationship into all-embracing conflict, for no good reason.”
“the West’s 25-year bet on China has failed.” (‘The Economist’ March 1, 2018 – https://www.economist.com/leaders/2018/03/01/how-the-west-got-china-wrong).
Response # 2
“in negotiations with then-President Barack Obama, China’s president Xi had agreed not to turn a series of manmade islands that China had created in the South China Sea into military installations. But then China did just that.” (John Pomfret, Washington Post, 23rd August 2018)
“I believe that we have no adequate economic playbook for competition with China. Last time we competed with or had a long difficult strategic relationship with a large communist country was during the Cold War, and our approach to that was simply not to trade with them. Now, one of our largest trading partners is in fact a communist country, and I don’t think that the economists have given us much of a playbook to protect our companies and our people.” (Ash Carter, Defence Secretary in the Obama Administration, Interview to ‘Politico’, February 19, 2018 – https://www.politico.com/magazine/story/2018/02/19/ash-carter-defense-global-politico-transcript-217023)