Although President Donald Trump started the trade war, pretty much all sides in America agree that China's steroidal state capitalism makes it a bad actor in the global trading system and poses a threat to security.
At the heart of these complaints is the role of China's government, which funnels cheap capital towards state firms, bullies private companies and breaches the rights of foreign ones.
As a result, China grossly distorts markets at home and abroad. The backlash is happening just as China's model of debt, heavy investment and state direction is yielding diminishing returns.
Mr Xi has ignored Deng Xiaoping's advice to "Hide your capabilities and bide your time", launching the "Made in China 2025" plan, an attempt to use state direction to dominate high-tech industries.
Lastly, China must protect the rights of foreign firms.
Given China's poor record, America will need room to respond through tariffs or arbitration if China does not meet its commitments.
Under him, China is becoming trapped in a bad cycle of sluggish growth, debt, state control and hostility abroad. A more economically liberal China would end up richer and make fewer enemies.
https://www.economist.com/leaders/2019/02/21/the-struggle-to-reform-chinas-economy
At the heart of these complaints is the role of China's government, which funnels cheap capital towards state firms, bullies private companies and breaches the rights of foreign ones.
As a result, China grossly distorts markets at home and abroad. The backlash is happening just as China's model of debt, heavy investment and state direction is yielding diminishing returns.
Mr Xi has ignored Deng Xiaoping's advice to "Hide your capabilities and bide your time", launching the "Made in China 2025" plan, an attempt to use state direction to dominate high-tech industries.
Lastly, China must protect the rights of foreign firms.
Given China's poor record, America will need room to respond through tariffs or arbitration if China does not meet its commitments.
Under him, China is becoming trapped in a bad cycle of sluggish growth, debt, state control and hostility abroad. A more economically liberal China would end up richer and make fewer enemies.
https://www.economist.com/leaders/2019/02/21/the-struggle-to-reform-chinas-economy
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