ABSTRACT
Recently, I attended a workshop, A Global Economy at a Crossroad, sponsored by the 1990 Institute. To my surprise, its first speaker, Andy Rothman (a former diplomat commissioned in Taiwan before), gave an excellent presentation on China’s economy with quite a bit of historical data. His data were consistent with some of the UN data, but more useful to dispel the myth or false notion that the U.S. helped China to join the WTO, but China stole the jobs from the U.S. and damaged its economy. This author feels that some of Rothman’s data is the best evidence for answering the title question of this column, that is, who helped whom since China joined the WTO in 2001?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
President Trump has been in office for over two months now. He has been busy delivering his campaign promises by signing executive orders, some of which were promised since his first term from 2017 to 2021, like the illegal immigrant issue. Trump won his 147th US presidency with his MAGA slogan, which he initiated in his 2016 campaign. In his second-term bid, he convinced more people that he would deliver MAGA. MAGA is a big goal that will transform the US economy, develop the manufacturing industry, upgrade infrastructure, streamline government services, balance trade, reduce national debt, and make America great again on the world stage.
After Trump was inaugurated, he started two measures to start the MAGA movement. First, he created the Department of Government Efficiency (DOGE) aimed at discovering government waste and removing non-strategic programs. This is a good move; the U.S. needs it. Appointing Elon Musk (not a politician) is also a smart choice. Second, he launched his tariff strategy (not a war, since Trump intends to bargain, not to wage a war) initially targeting Canada, Mexico, and China. Trump has a firm belief that the U.S. has been taken advantage of for too long by other countries, including China. This is partially true; the media has been leading the masses to believe so. However, blaming China for taking advantage of the U.S., stealing its jobs, intellectual properties, etc., is not a fair statement. The problem with the U.S. economy, national debt, loss of competitiveness, weakening in global leadership, etc., is much more a U.S. problem than a problem caused by China.
Recently, I attended a workshop, A Global Economy at a Crossroad, sponsored by the 1990 Institute. To my surprise, its first speaker, Andy Rothman (a former diplomat commissioned in Taiwan before), gave an excellent presentation on China’s economy with quite a bit of historical data. His data were consistent with some of the UN data, but more useful to dispel the myth or false notion that the U.S. helped China to join the WTO, but China stole the jobs from the U.S. and damaged its economy. This author feels that some of Rothman’s data is the best evidence for answering the title question of this column, that is, who helped whom since China joined the WTO in 2001?
To discuss the U.S. and China’s economy, one only needs to start from 1990 (the year the Soviet Union began to collapse and officially in 1991) when the U.S. became the only superpower in the world. In the Cold War, the U.S. adopted a strategy to ‘engage China’ to isolate the Soviet Union. We recall that the Nixon-Kissinger China policy was started in the 1970s, and Jimmy Carter formally recognized the People’s Republic of China (PRC) in 1979, when the PRC was officially recognized by the United Nations as the only legitimate representative of China. Many political scientists acknowledged that the U.S. victory in the Cold War was attributable to the ‘engagement policy’ with China, which broke the Soviet-China economic relations entirely, causing the eventual collapse of the Soviet Union.
The U.S. has assumed the leadership of the free world, promoting freedom and democracy since World War II. (Lighthouse of freedom and democracy). Started as a communist country, China has been regarded as a nation with no freedom or democracy. However, China, as a new republic nation (established in 1911), does have a long history and experience in governance. China (both sides of the Taiwan Strait) has been learning the modern political system guided by Sun Yet San’s book (Father of modern China, Three Principles of the People). Taiwan started early, influenced by the U.S., and was eventually transformed to be a multi-party government system adopting a one-person-one-vote election democracy, whereas Mainland China adopted a one-party system (90 million party members, 1/15 representation, including children in the population). The tight control of the discipline of the communist party members is making China appear to have less political freedom but more economic freedom. Its economic growth is a testament to the country’s economic freedom.
If we look at data on the US exports to the world since 1990, it has maintained a growth curve. What is more notable is that since China joined the World Trade Organization (2001 admitted by the WTO), U.S. exports to the world increased much faster, eventually, in 2023, they reached 646% to China and 171% to the rest of the world. (To Netherlands 359%, Mexico 229%, Brazil 212%, South Korea 195%, Singapore 160%, Germany 151%, Canada 113%, Japan 38%, etc. Just agriculture alone, the U.S. exports to China increased by 1200% (2023), whereas to the rest of the world it increased by 174%. China’s exports to the U.S. increased by 329%. These data indicated that since China joined the WTO, China has helped the U.S. and the entire world in trade more than the U.S. has helped China.
China’s overall advancement and its increased trade with the rest of the world lend evidence that China provides more economic freedom to its citizens than most countries in the world. Rothman pointed out that in early 1980s, China’s private industry was nearly no existence (Citizens had little economic freedom), but today, China’s industry consists of 90% private industries, many are in the advanced technologies area such as communication, construction, internet commerce, robotics (drones), electric vehicles, and AI. From 1990 to 2023, China’s private firms grew from 190 million to 450 million; 89% of its urban employment was provided by small private companies.
The current U.S. anti-China policy is worrisome and is based on wrong fears, such as since 2000 (China joined WTO in December 2001), China’s exports to G7 countries (including the U.S.) had dropped from 49.5% to 26% in 2024, whereas its export to the rest of the world increased from 51% to 73%. This can only indicate that the economy of the rest of the world has a stronger demand than the G7 nations. This is a G7 problem facing the rising economies in the rest of the world. China became the world’s manufacturer and the number one trading partner of 125 countries is a testament to China’s successful economic policies and its rigorous implementation through its multiple five-year development plans.
Currently, China’s economy has slowed down, but it is principally caused by the over-regulation the government imposed on the business environment during the COVID-19 pandemic. China’s fast-growing real estate market was halted, and people lost confidence in the economy, turning to saving rather than investment and consumption. The government is trying to restore that confidence (Xi has held a conference with private industry leaders recently). In Rothman’s opinion, China will restore its citizens’ confidence, and then its enormous savings and assets will pump up its economy again.
It is interesting to mention also two points Rothman stated in his presentation. One is that he believes that China will not use force to unite Taiwan because the cost is far greater than the benefits. On the other hand, he advises the U.S. to abandon its hostile China policy and stop selling weapons to Taiwan to provoke China; instead, the U.S. should seek collaborative relations, for example, dealing with the aging population issue. China will become as old as Japan today by 2050 to demographic estimates. China is spending on education to train productive people, and more money on senior care. The U.S. should seek opportunities and collaborative relations with China instead of maintaining a hostile relationship that offers no benefits to both countries.