China has formally created a US$29bil state-backed fund to invest in the semiconductor industry, advancing its goal of reducing a dependency on U.S. technology.
CHINA hawks are chastising President Donald Trump’s “phase one” trade deal because it focuses on increasing US exports while ignoring Beijing’s subsidies for favoured industries. Instead of seeking to coerce China into abandoning policies that both sides agree benefit its economy, the US should seek to emulate them.
In one typical critique, experts at the Peterson Institute, a Washington think tank, lamented that Trump hasn’t explained “how his deal would tackle the Chinese subsidies that were the impetus for launching this trade war in the first place.” That’s a view shared by many in Washington. Though Trump himself often appears more concerned about bilateral deficits, it’s worth asking whether the concern over subsidies actually makes sense.
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