When China was welcomed into the World Trade Organization in 2001, it was seen as a hopeful turning point. The belief was that free trade would open up its economy, raise living standards, and eventually lead to more openness in other areas too. But as Edouard Prisse shows in his book We Are Funding China’s Growth That Must Stop!, this optimism overlooked three key facts about China that should have made the outcome predictable.
First, China had an enormous reserve of low-paid workers. Between 400 to 600 million people in rural areas were ready to join the industrial workforce. No other country had such a large, disciplined labor force waiting for opportunity. Second, China’s political structure was and still is a centralised, authoritarian system. This means the government could support exports and suppress labor costs with a level of control that would not be possible in democratic nations. Third, under Deng Xiaoping, China had already shifted from full state control to a system that included private ownership and competition. This gave it the tools to grow rapidly, while still maintaining government control over key sectors.
With these elements in place, the outcome should not have been a surprise. China would produce more goods at lower costs, sell them abroad, and generate massive trade surpluses. The United States and Europe would import more, produce less, and gradually lose parts of their industrial base. And that is exactly what happened.
What is surprising is how few people warned about this. Economists, politicians, and analysts missed what should have been obvious. The imbalance was not a fluke—it was built into the system from the start. As Prisse notes, anyone familiar with basic macroeconomics should have seen the danger. Yet instead, there was widespread belief that free trade would somehow lead to long-term balance and reform.
At the time, the West felt confident. After the fall of the Soviet Union, many assumed that communism everywhere would follow the same path. It was expected that China, once integrated into global markets, would become more like the West. But China never adopted Western political values. It used access to global trade to grow strong without changing its core system.
Now, China holds over three trillion dollars in foreign reserves. Much of that money came from the trade surplus with the United States. That money has been used not just to strengthen the Chinese economy but to fund projects and influence in countries around the world. In effect, the West has helped fund the rise of a strategic competitor.
The mistake was not just economic. It was also one of perception. Western leaders believed that growth would bring convergence. Instead, it brought competition. The United States and its allies lost factories, jobs, and leverage, while China gained power, both economically and politically.
What is needed now is a shift in thinking. The first step is to admit that the strategy was flawed. As Prisse says, silence about this mistake only makes it harder to correct. The second step is to act. Instead of free trade with no limits, countries should pursue equal trade, so our imports and exports are kept in balance. This does not mean cutting off trade. It means setting fair terms that do not support one-sided advantages.
If the U.S. wants to keep its economy strong and its independence intact, it must stop giving China the upper hand through an unbalanced system. Read We Are Funding China’s Growth That Must Stop! to understand how this mistake was made, why it continues, and what we can still do to fix it before it becomes permanent.
Head to Amazon to purchase your copy: www.amazon.com/dp/1967963053.
