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Anthony Rowley

Almost anywhere you look these days, you can find claims from political, academic and other various sources that China’s supposed overproduction and exports of manufactured goods pose unfair advantages. These sources may also claim such unfair advantages justify protectionist countermeasures. But it is difficult to counter one’s own folly.
For decades, the US, much of Europe and even Japan, long proud of its manufacturing skills, have prided themselves on becoming “post-industrial” and services-oriented economies. They did not ask who is supposed to make “things” when thing-making is no longer in fashion.
So, it’s no wonder that a goal-oriented China, which strategically plans for the long-term rather than leaving matters to the supposed wisdom of the marketplace, stepped in to fill the inevitable supply and demand gap.
This statement is not made out of mere ideological conviction; it is a belief that comes from reporting and analysing the impact of industrial and deindustrialising policies in Britain, Japan and elsewhere.
The biggest and perhaps most bitter irony is that Western nations are struggling to reverse course and reindustrialise and effectively back out of a cul-de-sac which they entered willingly decades ago, only to find that China is dominating the high road of global manufacturing.
Re-industrialisation is becoming a mantra for politicians, openly in the case of Britain’s presumptive prime minister Andy Burnham, who talks of re-industrialising the country. Then, there is US President Donald Trump who advocates bringing manufacturing jobs “back home”. Re-industrialisation also seems to be a policy priority for Japanese Prime Minister Sanae Takaichi, although in Japan’s case it seems to be focused largely on reviving or establishing industries that can feed domestic and export demand for “defence” systems.


When and how did Western nations lose their manufacturing prowess? The Midlands and North of England were often described as being the “cradle of the Industrial Revolution” from the late 1700s onwards. Philadelphia could once claim that crown for the US. Germany too was a contender for the title.
In the case of Britain, the “rot” set in during the 1970s. As a writer for The Times newspaper in London at that time, I helped chronicle the decline at first hand. From industrial giants such as Vickers to producers like the British Motor Corporation, the collapse spread widely.
Complacency was one factor. There was a belief that a Britannia which had “ruled the waves” would continue ruling world markets, leading to poor managerial decisions that allowed nascent competitors such as Japan to make inroads. A low-cost Japan was the “villain” then, just as China is now.
Much the same applied in the US, where politicians tried to soften carmakers’ anger at Japanese companies’ market incursions by allowing workers to smash imported cars in public instead of confronting them with the fact of declining US competitiveness.

But financial markets accelerated the end of UK and US manufacturing supremacy. So-called “asset strippers” emerged, claiming that assets such as real estate were undervalued by stock markets and that their true value could be realised through share-financed “hostile” takeovers of long-established firms. Once acquired, these firms were closed down and their assets sold.
Thus began a long process of manufacturing attrition. The US, of course, wasn’t spared, as Wall Street called the shots and “shareholder value” was elevated above manufacturing skills and job preservation. Blue-collar blues set in among workers, in some ways, contributing to Trump’s political rise.
Notably lacking amid this sad decline was any sign of coordinated planning among major economic powers who, having stymied Japan’s competitiveness via the 1985 Plaza Accord, took to bewailing China’s rise instead, especially after Beijing joined the World Trade Organization in 2001.
Japan, which had achieved manufacturing excellence in the decades following World War II through the diligent pursuit of monozukuri or “thing making”, dominated sectors from automobile to machine tools. But the post-Plaza Accord ascent of the yen, coupled with a shift in Japan, influenced by the US, away from state-guided industrial policy towards free-market economics, hollowed out Japan’s manufacturing base.

In the face of this wave of retreat among yesterday’s manufacturing giants in the West and Japan, China has attained and held onto manufacturing excellence in numerous fields, especially in hi-tech areas. But this has been achieved at the cost of incurring the wrath of other nations, which blame China for their own policy shortcomings.
Some are waking up to this reality. One of them is Richard Baldwin, professor of international economics at the IMD Business School in Lausanne, Switzerland, who wrote in a recent blog post that “China is overproducing manufactured goods, and this creates its massive trade surplus, which the rest of the world is compelled to absorb”. As he noted, “If China runs a trade surplus, someone has to run a trade deficit.” That someone is chiefly the over-consuming and underproducing US.
The problem goes deeper than simply the need to address trade imbalances. It requires a systematic and coordinated approach to predicting the global demand and supply of goods. Diversity of supply – not just in the interests of national security but also in the face of threatened natural disasters and pandemics – is required. There is little point in playing the blame game. Mature and informed global leadership is needed on this critical issue. Is that too much to ask of our leaders? Maybe we should ask AI instead.


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Blaming China won’t bring jobs back to ‘post-industrial’ economies

A worker coats eyeglass lenses, on June 6, in Wenzhou, Zhejiang province. Photo: VCG via Getty Images

A worker labours at a precision metal stamping company in Birmingham, England, on June 11. Photo: AFP

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Europe wants a new Plaza Accord for China – seriously?

European Council President Antonio Costa (second left) walks with German Chancellor Friedrich Merz amid discussions on the EU budget for 2028, in Brussels, Belgium, on June 19. Photo: dpa

Then US Treasury secretary James Baker speaks to reporters at New York’s Plaza Hotel on September 22, 1985, as France, West Germany, Japan, the US and the United Kingdom sign the Plaza Accord, a deal to depreciate the US dollar in relation to the Japanese and German currencies. Photo: AP

BYD electric cars are parked for a presentation event in Berlin, Germany, on May 21, 2025. Photo: Reuters

EU sets October deadline for ‘tangible results’ on China imbalances after key trade talks

EU trade chief Maros Sefcovic speaks to the press following a meeting with Chinese Commerce Minister Wang Wentao in Brussels on Monday.  Photo: EPA

Wang and Sefcovic had an all-day trade negotiating session in Brussels on Monday. Photo: AFP

Lorenzi warns of economic conflict and unplottable solutions: ‘world without bearings’

People cool off near the Trocadero fountain in front of France’s Eiffel Tower last week during a heatwave. Jean-Herve Lorenzi, president of Le Cercle des economistes, contends that major European powers must reach a strategic agreement with China. Photo: Reuters

Jean-Herve Lorenzi, president of Le Cercle des economistes, contends that major European powers must reach a strategic agreement with China. Photo: Les Rencontres Eco

Anxious West seeks to rewrite global trade rules to counter China

Illustration: Craig Stephens

Opinion

World Opinion

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World

Economy, Trade & Business

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After decades of hollowing out their manufacturing bases, Western and Japanese policymakers can and should do more than bewail China’s rise


After decades of hollowing out their manufacturing bases, Western and Japanese policymakers can and should do more than bewail China’s rise.


China

China economy

World Trade Organization (WTO)

China trade

China exports

Britain

Germany

Donald Trump

Trade

Donald Trump’s China policy

Automotive industry

Japan

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Sanae Takaichi

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

Macroscope

Blaming China won’t bring jobs back to ‘post-industrial’ economies

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}After decades of hollowing out their manufacturing bases, Western and Japanese policymakers can and should do more than bewail China’s rise

After decades of hollowing out their manufacturing bases, Western and Japanese policymakers can and should do more than bewail China’s rise