this post was submitted on 31 Jan 2026
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As US influence wanes, the Chinese trade surplus strangles manufacturing across the globe (www.theguardian.com)
submitted 1 day ago by HellsBelle@sh.itjust.works to c/world@lemmy.world
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When the Canadian prime minister, Mark Carney, took to the podium at the World Economic Forum in Davos last week to lament how “great economic powers” were dismantling the international order, it seemed clear that he was talking about the United States. He might have been talking about China as well.

Not a week earlier, Beijing had revealed that China’s trade surplus ballooned by 20% in 2025, to $1.2tn. Despite Donald Trump’s wall of tariffs that crashed Chinese sales to the US, its overall exports expanded more than 5%. Sales to the 11 countries in Asia’s Asean bloc increased more than 13%. Exports to the European Union rose over 8%. Chinese imports, by contrast, were flat.

This gargantuan imbalance is strangling manufacturers from rich countries in Europe to poorer nations in Asia and Latin America. As Eswar Prassad, a former head of the China division at the International Monetary Fund, now at Cornell University, pointed out: “Forget Trump’s Tariffs. The Real Danger Lies in China’s Trade Surplus.”

Many factors contributed to the implosion of American governance. But Trump’s rise was largely propelled by a sense of grievance against a world order that, Americans believed, had taken the US for a ride.

America’s pain was largely self-inflicted. Manufacturing’s footprint shrunk in Germany over the last quarter century, like it did in the US. It shrunk in the UK and France, Italy and Japan. While those shifts have caused domestic political disruptions, in none of these other countries did voters try to punish the rest of the world for the loss, as Trump has.

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[–] avidamoeba@lemmy.ca 7 points 1 day ago* (last edited 1 day ago)

By the time the US did any of this, they had already lost most of the manufacturing capacity and supply chains. I don't think this can be brought back through small changes in the capitalist free market model that shipped it overseas. The US shipped manufacturing across border to other countries such as Taiwan and Mexico before China. Through a more holistic lens, I think what we're observing is the Chinese mixed market model outcompeting the capitalist free market model. It's able to spur competition where needed to develop new technology and manufacturing, as well as keep prices down to avoid rent-seeking in established, consolidated industries. We're failing on both accounts and the result is consolidation and unmitigated rent-seeking in virtually every sector which makes competitive manufacturing impossible. This is why my bet is that countries with real independence ambitions that want to preserve democracy would begin adopting the Chinese mixed model to bring costs down and outputs up. We'd see more government-owned corporations that run as non-profits, providing cheap inputs for the rest of the economy, where competition would be created by policy-directed public capital along with ruthless anti-trust enforcement. Democracy would still control the government direction, with much stronger union power. In case this looks strange or unrealistic, this how the Canadian among other western economies worked prior to neoliberalisation. This is my positive, democracy-preserving scenario.

The other likely scenario I see for preserving independence is large private corporations taking over the government further, removing any remaining real democratic power of the citizenry, crushing labour rights and dispensing with any remaining competitive market forces acting on them, driving into some form of corporatocracy/authoritarian capitalism. This is what the US is driving towards.

There's other scenarios for the non-independent states that depend on what China's long-term strategy is.