China Report: What’s up with all of Biden’s executive orders

The TL;DR here: The US and China used to trust each other in industrial cooperation and trade, despite ideological differences. But now, I think both sides will agree, that kind of trust doesn’t seem realistic anymore. These orders aim to move industries that emigrated from the US back stateside. (You can read more here about how the pandemic highlighted this issue.)

Despite that growing distrust, these new policies follow the same playbook that China has used for decades: generous industry subsidies, government funding for academic institutions, and entry barriers for foreign competitors to protect domestic companies. And it just might work! After all, it’s precisely the success of the Chinese government at growing key technology sectors in short periods of time that pushed the US to act in the first place.

Whether the administration admits it or not, I think these moves to build up domestic industries are a form of protectionism. It reminds me of the term “economic nationalism,” which the New Yorker writer E. Tammy Kim used to describe how both parties’ candidates in Ohio’s Senate race have promised to bring back manufacturing jobs from China. I don’t think the government stepping in to help a domestic industry is itself bad. But economic nationalism comes with problems, too: unfair competition, corruption, xenophobia, turning away trade allies, etc. Biden will surely be challenged from both sides on these issues.

I find it ironic that after years of criticizing the Chinese approach of developing domestic tech industries, the US—under both Trump and Biden—is also learning from China. But to be fair, the best way to produce tech advancement is likely halfway between overreaching government interventions and an unregulated free market. It will be interesting to see how the US handles that balance as compared with its rival.

Do you have a different thought on the Biden admin’s executive orders on China? I’d love to hear from you at [email protected].

Catch up with China

1. A car crash in Guizhou killed 27 people being transported to a covid quarantine facility. It sparked widespread outrage online about China’s ongoing zero-covid policy. (CNN)

2. Even though individual Chinese users have been blocked from Twitter, local governments are paying for tourism ads there—and they have become a fast-growing source of revenue for the platform. (Reuters $)

3. Brick-and-mortar store owners in Mexico are reselling the Shein clothes they bought online and making a fortune. (Rest of World)