Ben Solis
A new report has provided compelling evidence that China’s excess manufacturing capacity – long considered a potential weakness by many Western economists – may in fact be a critical part of Beijing’s efforts to undermine the United States by decimating the American manufacturing sector.
As the Alliance for American Manufacturing (AAM) writes, “Overcapacity is a feature, not a bug, of China’s model of state capitalism.” While a production glut may be a serious problem in a free-market economy, Beijing’s willingness to heavily subsidize Chinese industry has allowed Chinese companies to continue pouring cheap goods into foreign markets – including using backdoors through countries like Vietnam and Mexico to skirt American tariffs.
The concept of the state using its control of markets to wield excess manufacturing output as an economic weapon against capitalist nations has a long history in communist thought. Mao Zedong, China’s first communist leader, was an avid proponent of the writings of early Soviet philosopher Lyubov Axelrod, who proposed that the oversupply of capitalist markets with cheaper products manufactured by the communist state-sponsored companies could undermine the power of Western capital.
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