Sami Bensassi and Agelos Delis
For a superpower like the United States, free trade is, in practice, an invitation to partake in its wealth. But it also implies an obligation, including political support (or at least non-opposition) and an expectation that the poorer nation will give back part of its new riches by buying the superpower’s high-tech exports and debt. This, in essence, is the system that has worked wonders for the U.S. for nearly 75 years.
From 1978, the People’s Republic of China signaled its acceptance of this invitation with “economic free zones” in several of its provinces, which began to open up the Chinese economy to the outside world. It was an extraordinary moment, when former enemies the U.S. and China willingly chose a new path focused on trade.
Then in 2001, after more than two decades of a relationship characterized by mutual admiration, mistrust, and suspicion, China joined the World Trade Organization (WTO) – and over the next 11 years, further built up its relations with the United States.
But China did not play completely fairly. It subsidized and protected its nascent industries, manipulated its currency, and forced technological transfers (meaning that foreign companies had to enter joint ventures with local firms, sharing their technology and intellectual property).
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