Sep 22, 2020 - World

Study: China's economic policies directly harmed U.S. industries

an illustration of a chinese coin

Illustration: Eniola Odetunde/Axios

China's economic planning and targeted subsidies have increased the competitiveness of Chinese firms in the global economy to the direct detriment of U.S. industry, an academic study has found.

Why it matters: When it comes to American industries and workers, the rise of Chinese industrial policy hasn’t been a win-win — researchers found for every 100 factories opened in China, 12.5 U.S. factories in the same industry closed.

Details: Researchers at Columbia University and Boston College found that "high birth rates" of Chinese firms — meaning the opening of new factories and companies — negatively affected U.S. employment, in their April 2020 SSRN study.

What they're saying: "The key findings support the concern that U.S. firms are displaced by China’s manufacturing prowess, not just in 'sunset' industries from which the U.S. was happy to retreat, but also in industries that both countries are eager to lead, in a race that has been significantly shaped by the Chinese government."

The big picture: China's state-guided capitalism is increasingly showing itself to be a major challenge to a liberal global trade order premised on trading partners following a set of shared principles.

Go deeper: Beijing draws Chinese companies even closer

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