Let’s Learn from China’s Trade Bonanza
The free trade debate rages on ahead of the decision surrounding the Trans-Pacific Partnership, which involves several southeast Asian countries not including China. Trade proponents cite the efficiency benefits of increasing trade, whereas opponents are concerned with the economic damage of trade gone wild.
China has an extraordinary talent for maximizing exports relative to imports, enabling them to win trade surpluses year after year. The practice, sometimes mistaken for protectionism but more frequently considered mercantilism, could offer American policymakers and legislators a lesson on how to spur economic growth in a globalized economy. In only 10 years, China’s impressive regulatory structure enabled the nation to increase its trade surplus from $102bn to $593bn, representing a 19% annual growth rate.
On the other hand, the United States went from a nearly perfect trade balance in 1970 to an annual deficit of $531.5bn in 2015, representing a sizable chunk of the $18.2 trillion U.S. GDP.
Chinese trade growth didn’t arise from unrestricted free trade; it arose from a thoughtfully intricate system of policies designed to grow the Chinese economy. Chinese…
