Comment by energy123
8 hours ago
Neoclassical economics is quite clear that targeted protectionism is desirable under certain exceptions.
As for China, they would be more wealthy without the meddling of their government. There's no reason they couldn't be like Taiwan, but bigger. The Chinese people got to where they are in spite of their anchor.
Median wage in Taiwan is something like $14k, less than many urban areas in China, though obviously higher than the very rural areas in China. [1] It's a Reddit link, but it's using first party government data. I'm linking to it since just linking to a site in Chinese would not be very informative for most.
Huge GDP/capita in certain places is because of outsized industries that don't really translate to the average person. Ireland is another example where it's nearly twice as 'rich' as the US by that same metric, but it's just a nuance of it being an international hub for tax avoidance, not because the Irish are doing especially well.
[1] - https://www.reddit.com/r/taiwan/comments/1jmhhk1/realistic_s...
I remember half of the neoclassical economics focused articles about China from the late 90s and early 00s predicting that by not following ricardian comparative advantage China was shooting itself in the foot.
They kept predicting collapse, too.
Nobody talks much about the ricardian theory of static comparative advantage today. China's rise kind of invalidated it.
America was taken by surprise by its rise because of this. The cordial relations and trade flipped almost overnight to hostility once it was realized that China's economic power now rivaled that of that of the US and was poised to grow even more.
How do you know those economists were wrong? It's easy to conflate China's size with China's success. They liberalized their economy a great deal since the 1980s, which is responsible for the success they have had. That doesn't mean they couldn't be even more successful with further liberalization. Like a larger Taiwan.
Not really. In neoclassical economics protectionism is only justified as a necessary evil and it is always a form of militarism (spending money to weaken or defend against your enemy), rather than building yourself up.