Doug Irwin: belief

Transcript context

…Some questions about trade in Asia. Should the United States allow China to buy US semiconductor companies? One could invoke national security. Without answering that specific question — and of course, we do have a process for reviewing those things — there is a big question about how easily we can integrate China further into the world trading system. That is, I don’t think things have developed the way a lot of people hoped when China joined the WTO and we gave them a permanent normalized trade status. It’s become much more mercantilist, much more interventionist, much more protectionist in nontariff ways than a lot of people thought and hoped that China would evolve. This is a question that economists raised after World War II, as well. A great trade economist such as Jacob Viner saying, “Can we really integrate the Communists and the non-Communist worlds in a trading system?” Turns out the answer was no. I guess my worry with China is, the more they push it, and they are pushing the envelope in terms of the rules of trade as we in the West see them, in terms of limited government support for firms, and things of that sort, they’re pushing things. I think that we could be moving in a direction where there will be more trade conflict, even set aside Trump and all that sort of thing. China decides to keep out Uber, and Didi, of course, becomes the market leader for ridesharing in China, a much larger company than Uber now. China also keeps out Google and Facebook, and there are Chinese equivalents or near equivalents that rise to take their place. Just from the point of view of Chinese economic welfare, not global welfare, but China alone, are those economically rational decisions good for the Chinese economy?…

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