NY Times: China is Waging an Industrial War – We are Losing

In an editorial published in The New York Times on January 9, 2025, Robert D. Atkinson, founder of the Information Technology and Innovation Foundation, delivers a stark warning: China is winning the industrial war. The editorial credits Donald Trump for highlighting China’s ambitions but critiques successive administrations for insufficient action. Atkinson argues that American policymakers are only beginning to grasp the scale of the threat posed by China’s deliberate and aggressive strategies to undermine the U.S. economy and cement its position as the global leader in innovation and manufacturing.

How China is Winning the Industrial War

Unlike traditional capitalist motivations of profit and growth, China’s trade policies prioritize power. Its government willingly incurs economic losses to achieve strategic advantages over adversaries. Employing tactics such as undervaluing its currency, subsidizing industries, and manipulating global trade, China has overtaken the United States in critical sectors including telecommunications, solar panels, and commercial drones. Moreover, it is rapidly advancing in electric vehicles, semiconductors, and quantum technology. These efforts are supported by extensive intellectual property theft, closed domestic markets, and massive government investments.

The numbers paint a dire picture. China accounted for 72% of global LCD production in 2024, up from nearly zero in 2004, thanks to government subsidies that often exceed corporate profits. It leads the world in industrial robot installations and nuclear power plant construction and is closing the gap in semiconductors with $50 billion in subsidies. Its state-owned aerospace company COMAC is on track to surpass Boeing and Airbus in jet sales.

America’s Struggles

America’s response has been fragmented and reactive. Policies like the CHIPS and Science Act represent steps in the right direction, but they’re insufficient to counteract decades of industrial decline. The U.S. has lost millions of manufacturing jobs and tens of thousands of factories, leaving critical sectors vulnerable. This lack of preparedness has allowed China to gain significant ground in industries that are essential to future economic and military power.

The problem is rooted in outdated assumptions. Post-World War II, U.S. policymakers believed free trade would naturally lead to global prosperity and democratic stability. However, this idealistic vision ignored the possibility of nations weaponizing trade for strategic advantage. China’s actions have shattered this illusion, but America’s slow adaptation to this reality has left it at a disadvantage.

What Must Be Done to Win

To counter China’s advances, the United States needs a multifaceted and proactive strategy. Atkinson outlines several key measures:

1. Currency Realignment: The U.S. should follow Ronald Reagan’s example and negotiate a significant devaluation of the dollar. If diplomacy fails, the Treasury Department should act unilaterally to lower the dollar’s value, making American exports more competitive and imports more expensive.
2. Reform Trade Laws: Congress must eliminate requirements that unfair trade practices cause direct harm to U.S. companies before imposing remedies. This would enable faster responses to China’s predatory tactics.
3. Strengthen Alliances: The U.S. should collaborate with allies to counteract China’s trade distortions and increase foreign aid to help developing nations resist Beijing’s economic influence.
4. Invest in Emerging Industries: America must expand its leadership in advanced fields such as artificial intelligence, quantum computing, and nuclear fusion. This requires sustained government investment and incentives for private-sector innovation.
5. Attract Global Talent: By easing immigration barriers for scientists and engineers, the U.S. can strengthen its technological edge.

Atkinson emphasizes that these steps do not represent a retreat into protectionism. Instead, they are pragmatic responses to the realities of a global economy distorted by China’s power-driven trade policies. America’s industries—from aerospace to semiconductors—depend on access to global markets, and a strategy rooted in collaboration and innovation is essential to maintaining that access.

The industrial war is not a distant threat; it is already underway. China’s deliberate strategies and relentless pursuit of dominance should serve as a wake-up call for American policymakers, businesses, and citizens. To secure its economic future and global standing, the United States must act with urgency, creativity, and unity. As Atkinson’s analysis makes clear, the stakes could not be higher: failure to act decisively risks ceding the 21st century to an adversary determined to reshape the world order to its advantage.

PBP Editor: Perhaps this is why we elected Donald Trump…