Trade balance: not a straight forward win-win – Victor Shih

After the election of Donald Trump as US president and the possible derailment of Sino-US relations, other countries, like Canada, see opportunities in making trade deals. But striking a balance in trade relations is never straight forward, warns political analyst Victor Shih in the Globe&Mail.

The Globe&Mail:

New scholarship adds grounds for skepticism. In “The China shock,” a recent academic article, an international team of researchers showed that the extraordinary rise of Chinese exports since 2001 eradicated millions of U.S. jobs with only “extremely modest offsetting employment.” In other words, they found, after the decade of frenzied trade that followed China’s accession to the World Trade Organization, “U.S. net welfare gains are close to zero.”

It suggests the need for “a more balanced view about the benefits and pitfalls of free trade,” said Victor Shih, a China scholar at the School of Global Policy and Strategy at the University of California, San Diego.

Another point of caution lies in China today, which has pushed a plan called Made in China 2025 to massively grow domestic capacity in robots, aeronautical equipment, rail and advanced medical products, among others – some of which overlap with Canada’s areas of expertise.

“It may not make so much sense to rush headlong into lowering trade barriers with China, because across a large number of sectors the Chinese government is heavily subsidizing industrial goods producers,” Prof. Shih said.

“Politicians and voters really have to think about this carefully.”

More in the Globe&Mail.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

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