Many governments and economists have long argued in favour of free trade and globalisation. They are not wrong— global trade has brought prosperity to millions, including those in the world’s poorest countries. But traditional economics says that any damage to local industries caused by foreign competition will be short-lived as workers retrain and acquire new skills. However,The China Shock, a paper published earlier this year, has provoked new debate by arguing that the impact is much longer lasting, causing loss of industries and jobs—and that governments must grasp this point if the unemployed and their communities are not to rot.
We can’t continue to allow China to rape our country, and that’s what they’re doing. It’s the greatest theft in the history of the world.” The words were Donald Trump’s at a rally in Indiana; the subject was the United States’s trade deficit with China.
An abandoned car plant in Detroit: “by the end of 2008, one-third of all the jobs in US manufacturing at the peak had gone, the bulk of them in less than a decade”