The Explosive Rise of Subsidies to Chinese Industry

How China’s Mercantilism Hurts the Global Economy

1. Alan Goodrich, Ted James, and Michael Woodhouse, “Solar PV Manufacturing Cost Analysis: U.S. Competitiveness in a Global Industry,” National Renewable Energy Laboratory, October 10, 2011,

2. “Listed Companies in 2010 that were granted government subsidies,” Caing Statistics.

3. Hong Sheng, The Nature, Performance and Reform of State-owned Enterprises (China: Unirule Institute of Economics, 2012).

4. In the June 13 American Spectator, Jed Babbin, former deputy undersecretary of defense under George H.W. Bush, wrote, “China isn't just our lender. It's not a free-market trading partner hoping that a rising economic tide will raise both economies out of the recession. China is an adversary, a 21st century mercantilist nation whose policy is to gain economic strength by manipulating markets. And its role as our reliable lender is aimed at manipulating U.S. economic strength as a means of diminishing our ability to interfere in Beijing's ambitions.”

5. As a visitor leaves the local history display state-owned museum in Shenzhen, China the plaque talks about the “shame of China” for being dominated by colonialist and the Japanese.

6. Such dislocation is very costly. See David H. Autor, David Dorn and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States” (working paper, National Bureau of Economic Research, June 2011),

7. Quoted in Ha-Joon Chang, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism (New York: Bloomsbury Press, 2008), p. 67.

8. Hans Fehr, Sabine Jokisch, and Laurence J. Kotlikoff, “Will China Eat Our Lunch or Take Us Out to Dinner? Simulating the Transition Paths of the U.S., EU, Japan, and China,” (working paper 11668, NBER, October 2005),