China has scored a major perceptual victory on its role in global trade
‘China’s political apparatus is leveraging on a perceived protectionist shift in America in order to cleverly redirect the world’s perception’
In Washington, US President Donald Trump champions protectionism while China’s President Xi Jinping becomes the world’s chief cheerleader for free trade. Has the world been flipped on its head?
Are they saying something different, or are they saying the same thing? The answer rests not in words but in actions.
The past three decades have seen great growth in international trade. Since the start of the century, global trade has grown 1.5 times and China has grown – and profited – with it. What is less well known is the story behind the numbers.
This massive opening of trade for the world did not mean open trade for foreign companies coming into China. Joint ventures were mandated for any company seeking to access the China market. For Chinese firms, however, expanding abroad meant using anything but joint ventures.
Barriers to entry, even under the guise of national interests, is still protectionism that creates ample opportunity for the growth of national champions
Chinese firms learned from developed country multinationals to not only close the competitive gap, but to create a gap that they led. As a result, Chinese multinationals are now market leaders in electronics and home appliances, with some set to become global leaders in key emerging industries such as solar power.