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Michael Schuman

Trump Is Doing China a Favor

The “Made in China 2025” industrial strategy is going to cause Beijing more headaches than anyone.

Subsidies have inflated the electric-car sector.

Subsidies have inflated the electric-car sector.

Photographer: Qilai Shen/Bloomberg

Prospects for a trade deal between U.S. President Donald Trump and Chinese President Xi Jinping at the upcoming Group of 20 meeting in Argentina are quite likely to founder on the question of China’s industrial strategies: While Beijing may be willing to buy more American goods to mollify Trump, it almost certainly won’t stop supporting sectors it sees as key to China’s technological and economic progress.

In fact, China would be much wiser to scale back its industrial policies now. They could well turn into a bigger headache for China’s own economy than for the rest of the world.