Manufacturing is now a global activity and foreign actions play a role. Among the many global factors, the single most important is Chinese subsidies.

The importance of Chinese subsidies

Derek M. Scissors 

Testimony before the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy

Large economies should always get their own house in order first. American private wealth is by far the world's highest, on the order of $45 trillion ahead of Japan's and China's.[1] This staggering achievement has been due overwhelmingly to American policies, not foreign. The challenges facing the U.S. economy, and manufacturing in particular, can and should be addressed primarily by American policy.

As a secondary matter, manufacturing is now a global activity and foreign actions play a role. Among the many global factors, the single most important is Chinese subsidies. The People's Republic of China's (PRC) manufacturing sector is the only one of comparable size to the U.S. It is driven by government intervention, rather than genuine commercial competition, and this intervention harms American manufacturing companies and workers.

The harm is usually identified as large-scale U.S. imports from China. In fact, the main problems are barriers to American exports to the PRC and, perhaps soon, a growing battle in third markets. For the last decade, Beijing has acted as if competition is good for everyone except Chinese firms on their home turf.

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