Lessons in Chinese history as America shuts off from the world

By Walid Hejazi   

Economy Industry Government Manufacturing China Economy Exports manufacturing trade Trump

It's now a post-American era, where the US is not falling, but other countries are closing the gap.

President Donald Trump and First Lady Melania Trump arrive in China with Chinese President Xi Jinping, November 8, 2017
Photo: Shealah Craighead

Those who have studied history understand the importance of being engaged in the global economy.

Two thousand years ago, China represented nearly 25% of the global economy. In 1600, it was 30%, and a third in 1820. The country was a global powerhouse, to say the least.

There is a famous story from 1792 when King George III’s ambassador led a trade mission to China with a cargo of the latest European technologies to present to the Chinese emperor – telescopes, globes, barometers, lenses, clocks, carriages, and other such things.

Historians report the Chinese emperor said: “There is nothing we lack – we have never set much store on strange or ingenious objects, nor do we want any more of your country’s manufactures,” thus reflecting his insular view.


A complicated set of factors, including weak Chinese leadership, internal conflict and a rejection of Western technology led to China turning inward and missing out on the Industrial Revolution. This left China significantly weakened, and subject to invasion and Western humiliation.

China down and out for more than a century

China’s demise in the 1800s lasted for more than 100 years. It was not until the 1978 Chinese Communist Party reforms under Deng Xiaoping that China re-emerged, allowing it access to Western markets and technology, thus providing economic growth and prosperity for the Chinese people.

Today, on a PPP (purchasing power parity) basis, China is the largest economy in the world – as it was 200 years ago.

Interestingly, China’s growth was driven by exports in industries that saw the most significant liberalization. Going forward, China’s growth will likely slow as it will need to increasingly compete in industries in which there is much more protection.

This experience provides clear lessons for the US.

The US has been the world’s largest economy for the past 150 years. As journalist and author Farid Zakaria noted in his 2008 book The Post-American World and the Rise of the Rest, it’s now a post-American era, where the US is not falling, but other countries are closing the gap.

But Zakaria’s book was published before the rise of Donald Trump and the insular and protectionist sentiment sweeping America.

Trump rejects access to global economy

The first tangible action of the Trump administration that pushed the US towards an isolationist stance was his rejection of the Trans Pacific Partnership, a trade agreement that would give the US access to an enormous share of the global economy.

Trump has also ordered a renegotiation of NAFTA, and has imposed tariffs on steel and aluminum imports into the US, prompting swift retaliatory action from the Europeans and Canadians. And now there is a very real possibility of a further round of tariffs. An all-out trade war seems increasingly likely, with dangerous economic and political ramifications for the United States and the world economy.

Also, and remarkably amid tensions with North Korea, Trump has also forced more protectionist dimensions into the US’s free-trade agreement with South Korea.

Trump’s views that such agreements allow the rest of the world to benefit at the expense of the US is so very wrong – these are not zero sum agreements. His moves to limit immigration are another dimension in his insular and protectionist vision for the US.

Reminiscent of China

Closing the US off to the rest of the world is reminiscent of China more than 200 years ago. Of course, the circumstances are very different and it’s a different age. Nevertheless, leading economies of the world must be fully engaged in the global economy, both economically and politically.

It’s time for Trump and his supporters to understand that it is inconsistent to be a global power and protectionist.

The United States must remain open to trade, investment, immigration and the free flow of ideas. It must remain fully engaged in international institutions such as the United Nations, the International Monetary Fund and the World Bank _ being a superpower is about both hard and soft power.

There is a clear contradiction between “make America great again” and closing off from the world. If the US closes itself to the world, its future as a world leader in every way is at significant risk.

Walid Hejazi is the associate professor of International Business, Rotman School of Management, at the University of Toronto. This article was originally published on The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. 





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