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Much of the responsibility for putting this right falls on China. It may ask why it should hold itself back. After all, 19th-century Germany and America grew rich behind subsidies and tariff walls; Britain and Japan were bullies. Yet, having done so well out of the global commercial ecosystem, China should recognise that it has become one of its custodians. Abuse it—illegally or by overburdening it—and it will break.
At the heart of these tensions is one simple, overwhelming fact: firms around the world face ever more intense competition from their Chinese rivals. China is not the first country to industrialise, but none has ever made the leap so rapidly and on such a monumental scale. Little more than a decade ago Chinese boom towns churned out zips, socks and cigarette lighters. Today the country is at the global frontier of new technology in everything from mobile payments to driverless cars.
If Donald Trump had slapped punitive tariffs on all Chinese exports to America, as he promised, he would have started a trade war. Fortunately, the president hesitated, partly because he wants China’s help in thwarting North Korea’s nuclear ambitions. But that is not the end of the story. Tensions over China’s industrial might now threaten the architecture of the global economy. America’s trade representative this week called China an “unprecedented” threat that cannot be tamed by existing trade rules. The European Union, worried by a spate of Chinese acquisitions, is drafting stricter rules on foreign investment. And, all the while, China’s strategy for modernising its economy is adding further strain.
The Economist: Does China Play Fair
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