Globalization is perhaps best explained not with statistics, but with a pair of foods beloved in China.\u00a0<\/p>\n
Consider Shenyang\u2019s chicken racks and Wuhan\u2019s duck necks \u2014 two dishes born directly from trade. In the 1990s, Liaoning\u2019s poultry plants<\/a> exported white-feathered chickens to Japan. Japanese consumers rejected the racks \u2014 the leftover frames stripped of meat \u2014 so they were sold cheaply to local workers in Shenyang, who turned them into a beer snack<\/a>. After China\u2019s entry to the World Trade Organization, Henan-based companies like Huaying Agricultural Group<\/a> began exporting duck breasts to Europe and America. Western consumers wanted only the premium cuts, leaving the heads, wings, and necks behind. Those scraps traveled a few hours south to Wuhan, where they became the foundation of a local culinary culture. Today, duck neck<\/a> is to Wuhan what barbecue is to Memphis. Globalization, and the preferences of distant consumers, made this transformation possible. The opening of markets allowed individuals from all across the world to become aware of a much under-appreciated Chinese cuisine, and the resulting demand transformed the cuisine in return. In a way, it is diplomacy through the stomach.<\/p>\n This is precisely Douglas Irwin\u2019s insight<\/a>: trade is not an abstraction. Trade preferences ebb and flow organically between countries with seemingly distant cultures and customs, and reshape daily life. Whole industries are created from byproducts. The tastes of a shopper in D\u00fcsseldorf are intimately tied to the diet of a student in Wuhan. As Milton Friedman knew<\/a>, markets work through dispersed knowledge \u2014 billions of individual choices created a demand \u2014 and dishes \u2014 that no planner in Beijing could have designed.\u00a0<\/p>\n China joined the World Trade Organization (WTO) in 2001, adding something fundamental to the trade globalization project. The world had a General Agreement on Tariffs and Trade (GATT), tariff cuts, and cross-border trade, but that global export market lacked a large, disciplined labor force capable of functioning as the world\u2019s factory. Japan briefly played that role in the 1970s and 1980s, but its bubble burst<\/a> and the model collapsed. The Four Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan) had readily combined Western capital and technology with local labor and education programs to become hubs of production and processing, but each lacked the scale necessary to anchor truly global demand for modern goods.<\/p>\n Ronald Coase and Ning Wang, in How China Became Capitalist<\/em>, described the process as a capitalist transformation<\/a>\u2014though Beijing would never admit to the word. Bottom-up reforms since the 1980s, coupled with WTO access, lowered transaction costs, attracted investment, and opened markets. From 2001 to 2016, China\u2019s GDP multiplied nearly tenfold, and the country reached its international peak between 2008 and 2016. <\/a>By 2023, China accounted for almost 30 percent<\/a> of global manufacturing output \u2014 more than the United States, Japan, and Germany combined.\u00a0<\/p>\n Without China, globalization would have been a club of rich and dominant countries trading with each other. With China, it became a system that benefited nearly every household in the developed world.<\/p>\n China\u2019s entry into the WTO was hailed by Presidents Bill Clinton<\/a> and George W. Bush<\/a>, who hoped integrating hundreds of millions of skilled workers into a rule-based trade order would offer not just economic advantage to the Chinese people, but political liberty, as well. That liberty has largely failed to emerge<\/a>. A relatively wealthier, globally connected China continues to violate<\/a> the human rights<\/a> of its citizens and neighbors, including Taiwan<\/a>, Tibet<\/a>, and Hong Kong<\/a>.\u00a0<\/p>\n Nor has China\u2019s globalization been without costs for the rest of the world. In Europe, Chinese solar panels sold at below-market prices devastated local producers in Munich and Brussels<\/a>. The same story repeats in other nations, with electric vehicles<\/a>, smartphones<\/a>, semiconductors<\/a>, prescription drugs<\/a>, and medical devices<\/a>. The \u201cChina Shock,\u201d as documented by David Autor, David Dorn, and Gordon Hanson,<\/a> showed how regions of the US exposed to Chinese import competition suffered persistent job and wage losses. Low-skilled workers with no college degree were hurt the most. Consumers benefited from cheaper goods, but voters began to question whether the bargain was fair.<\/p>\n The deeper problem is that China, having gained so much from globalization, began to weaponize it against the very countries that had helped lift its country out of destitution. Subsidy-fueled overcapacity, export coercion, and selective trade retaliation turned economic <\/a>interdependence into political and military leverage<\/a>. <\/a>Neighbors were blackmailed<\/a>, partners punished,<\/a> and the global system distorted. Technological tactics have ramped up with psychological warfare to manipulate and influence public opinion.\u00a0<\/p>\n Washington took notice of these aggressions. Charlene Barshefsky, who had helped represent the Bush administration in admitting China into the WTO, found her initial optimism soured, and recently lambasted<\/a> previous presidents for not holding China accountable to the WTO\u2019s rules. Donald Trump\u2019s trade war stepped up tariffs \u2014 including 100 percent on Chinese EVs \u2014 and imposed duties on critical minerals. Europe reacted with its own duties on EVs. Beijing retaliated<\/a> with tariffs on EU pork (including pig ears, noses, and feet, which are popular in China), targeting exactly the kind of complementary consumption seen in duck necks and chicken racks. Globalization shifted from cooperation to confrontation.<\/p>\n Even so, removing China from the international trade order remains unthinkable. In 2024, China was still the world\u2019s largest merchandise exporter, shipping about $3.6 trillion worth of goods<\/a> \u2014 14.6 percent of the global total. Its manufacturing value-added of $4.66 trillion accounted for 29 percent<\/a> of the world\u2019s output. <\/a>US-China trade still totaled $582 billion<\/a> in 2024, even after tariffs, and the volume and value of that trade still tick upward<\/a>. China still runs persistent trade surpluses approaching $1 trillion annually<\/a>.<\/p>\n Rational consensus now speaks not of outright decoupling but of \u201cde-risking\u201d and \u201cfriend-shoring.\u201d Developed nations are diversifying supply chains, shielding sensitive nodes like chips and batteries, and maintaining tight control of technology, while leaving non-strategic trade largely intact (if tariffed). That will cost China leverage, lessening its capacity to coerce other players and manipulate markets with subsidy shocks.\u00a0<\/p>\n Eventually, China will have to look in the proverbial mirror to address its misguided economy. For advanced economies, the moral hazard is equally stark: decades of cheap \u201cChina prices\u201d left them vulnerable to offshoring and dependent on authoritarian-led supply chains.\u00a0<\/p>\n China once showed the world how openness could turn a poor country into a great power. Its future may depend on remembering that lesson. If China adapts, it can still prosper in a more pluralized order. Globalization works best when it is a bargain, not a weapon.<\/p>\n The post How China Remade Global Trade \u2014 and Then Broke It<\/a> was first published by the American Institute for Economic Research (AIER)<\/a>, and is republished here with permission. Please support their efforts.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Globalization is perhaps best explained not with statistics, but with a pair of foods beloved in China.\u00a0 Consider Shenyang\u2019s chicken racks and Wuhan\u2019s duck necks \u2014 two dishes born directly from trade. In the 1990s, Liaoning\u2019s poultry plants exported white-feathered chickens to Japan. Japanese consumers rejected the racks \u2014 the leftover frames stripped of meat …<\/p>\n","protected":false},"author":717,"featured_media":2324418,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":["post-2498495","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2498495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/users\/717"}],"replies":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/comments?post=2498495"}],"version-history":[{"count":1,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2498495\/revisions"}],"predecessor-version":[{"id":2498496,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2498495\/revisions\/2498496"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media\/2324418"}],"wp:attachment":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media?parent=2498495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/categories?post=2498495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/tags?post=2498495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}