中美貿易戰

China wants to make machines and tools, too

Economists like to talk about the “value chain” of manufacturing. Some things, like sewing shirts, don't take a lot of capital or education or specialised skills. All the way at the other end of the chain you have airplanes, which demand massive plants and a well-trained, well-paid workforce. The original argument for normalising trade with China in 2001 was that it could have the lowest links on the chain, and more developed countries could clip in a little higher.

And that's basically how it worked. The consequences were disastrous, both economically and politically, but China did, as planned, knock the US entirely off the bottom links. The US apparel industry basically disappeared over about a decade, for example. But there's another flaw in the logic of the value chain: the original argument assumed that developed economies could keep moving up, but China would continue to be happy hanging on at the bottom.

China is not happy hanging on at the bottom.

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