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US-China relations: economic globalisation has forever changed, warns ex-finance minister Lou Jiwei

  • Prominent and outspoken government adviser accuses US of trade protectionism as it tries to reshore manufacturing and boost American competitiveness with China in hi-tech sectors
  • Still, there is room for improvement in economic globalisation despite recent setbacks

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Former Chinese finance minister Lou Jiwei speaks on Saturday at the Global Asset Management Forum 2022 Fall Summit. Photo: Weibo
Orange Wang

The world’s best days for economic globalisation are behind it forever, and the US’ “ideologicalised” industrial subsidies are bound to fail, warns an outspoken former Chinese finance minister as Washington steps up its countering of Beijing in technology and supply chains.

And various factors undercutting the foundation for globalisation – including such ideological moves by Western countries – are unlikely to end soon, according to Lou Jiwei, who is now director of the Foreign Affairs Committee of the Chinese People’s Political Consultative Conference, the country’s top political advisory body.

“The economic globalisation that brought the broadest benefits to the people of the world will not come back,” he said on Saturday at the fall summit of the Global Asset Management Forum, held by the China Wealth Management 50 Forum think tank.

He criticised the United States for blatantly legislating industrial subsidies and even blacklisting companies that accept incentives from investing in China, under the Chips act. The international community has long accused Beijing of stifling competition for foreign firms in China by offering large subsidies to its own state-owned enterprises.
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But Lou contends that “the practice of ideologicalised industrial subsidies has never happened in China”.

The US’ blaming of China for giving industrial subsidies to its domestic firms and distorting the global market was a focus of the US-China Strategic and Economic Dialogue – a mechanism that ground to a halt under the presidential administration of Donald Trump.

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But Lou stressed that “China at that time admitted that such problems did exist and has taken measures to correct them”.

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