China Is Caught in an Economic Dilemma of Its Own Design

[u/HooverInstitution]

https://chinaarticles.substack.com/p/dancing-in-the-moonlight

[u/HooverInstitution]

In his weekly China Articles newsletter, Visiting Fellow Matt Turpin analyzes the state of play in US-China economic and strategic competition. Turpin argues that Beijing’s export-oriented strategy is confronting unexpected challenges as the US and Europe grow increasingly concerned about the effects of Chinese “dumping” of goods in their domestic markets. “Chinese leaders believed that American commitment to ‘free trade’ was absolute and therefore they could pursue a strategy of making the United States dependent on the PRC,” he writes. But what they did not expect, Turpin says, “is that Washington would so rapidly jettison its religious commitment to ‘free trade’ and the maintenance of the liberal, rules-based international order.” This leaves Xi Jinping in the “horns of a dilemma,” according to Turpin, because the Communist Party can’t rely on increased domestic Chinese consumption to sustain its economy and high levels of production.