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Opinion
Gabriel Wildau

China's Industrial Policies Work. So Copy Them

Washington’s focus on ending Beijing’s subsidies is illogical and self-defeating.

If governments can’t pick winners, then why object to China’s subsidies?

If governments can’t pick winners, then why object to China’s subsidies?

Photographer: STR/AFP/Getty Images

China hawks are chastising President Donald Trump's “phase one” trade deal because it focuses on increasing U.S exports while ignoring Beijing's subsidies for favored industries. Instead of seeking to coerce China into abandoning policies that both sides agree benefit its economy, the U.S. should seek to emulate them.

In one typical critique, experts at the Peterson Institute, a Washington think tank, lamented that Trump hasn’t explained “how his deal would tackle the Chinese subsidies that were the impetus for launching this trade war in the first place.” That’s a view shared by many in Washington. Though Trump himself often appears more concerned about bilateral deficits, it’s worth asking whether the concern over subsidies actually makes sense.