he global economy is fragmenting and a new era of protectionism has dawned. Dreams by free marketeers of a frictionless world in which goods and services moved seamlessly from country to country are dead.
This is not quite what the US and its developed-country allies envisaged when China was admitted into the World Trade Organization in 2001. Back then, the feeling was that if China could make manufactured goods more cheaply than domestic producers then that meant higher profits for western multinationals and lower prices for western consumers.
This, though, ignores some deep structural weaknesses in the Chinese economy, not least a worrying demographic trend that will see its working-age populationErik Britton, managing director of the Fath om Consultancy, says it has been apparent for at least a decade that China’s growth rate is slowing and that the period of rapid catch-up with the US is over, at least for now.
The thinking behind the tough stance being adopted by the US goes as follows. First, it was a mistake to assume that China would become more liberal once it was plugged into the global economy.
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