China Is Pulling Up the Ladder Behind It: How Beijing’s Export Strategy Will Keep Poor Countries Poor
https://www.foreignaffairs.com/china/china-pulling-ladder-behind-it?utm_campaign=re&utm_content=&utm_medium=social&utm_source=reddit_user
China Is Pulling Up the Ladder Behind It: How Beijing’s Export Strategy Will Keep Poor Countries Poor
https://www.foreignaffairs.com/china/china-pulling-ladder-behind-it?utm_campaign=re&utm_content=&utm_medium=social&utm_source=reddit_user
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[Excerpt from essay by Shoumitro Chatterjee, Assistant Professor of International Economics at the Johns Hopkins University School of Advanced International Studies and Nonresident Scholar at the Carnegie Endowment for International Peace; and Arvind Subramanian, Senior Fellow at the Peterson Institute for International Economics. From 2014 to 2018, Subramanian served as Chief Economic Adviser to the Government of India.]
The focus on how China’s economic strategy affects the United States and Europe has obscured a larger problem. The most consequential victims of the current China shock are not workers in Detroit or Stuttgart, but future workers in places such as Addis Ababa, Dhaka, Lagos, Nairobi, Phnom Penh, Surat, and Tirupur. Their losses cannot be measured mainly in job cuts or factory closures, but rather in terms of factories never built, export markets never entered, capabilities never accumulated, and development paths never opened. That is the real toll of what is now called the “China squeeze.”
The stakes of the China squeeze are immense. The issue is not only hundreds of billions of dollars in forgone exports, it is whether latecomers to development still have access to the most reliable path of structural transformation the world has known. Historically, almost every country that escaped from poverty to prosperity did so by relying on manufacturing exports: garments, toys, footwear, furniture, electronics assembly, and other sectors that absorb large numbers of less-skilled workers while building firms, logistics, know-how, and state capacity. China benefited enormously from an open trading system that allowed it to lift hundreds of millions of people out of poverty through manufacturing for the global market. China’s own rise may now block that same path for countries poorer than itself.
The West keeps poor countries poor: They’re so good at business!
China keeps poor countries poor: They’re so inhumane!
Don’t forget that China Bad guys!!1!
much of china is still very poor which can partly explain it, see this: https://www.economist.com/finance-and-economics/2026/05/21/the-other-china-shock
China’s trying to pivot to service economy with a large middle class while retaining a large manufacturing sector. Nobody else has pulled that off yet.
It is important to note that China (as a country ruled by the Communist Party) is still a nation where freedom of movement is restricted.
While China’s urban areas generate high incomes and compete with developed countries in high-value-added manufacturing, its underdeveloped regions still compete with other underdeveloped countries in low-value-added manufacturing at low income levels.
Ultimately, it can be said that China’s urban and rural areas are effectively two different countries in terms of the labor market and social mobility. While such a dual structure could not be sustained in other countries where freedom of movement is guaranteed, it persists in China due to the nature of communism.
Recommended reading
[https://en.wikipedia.org/wiki/Mingong](https://en.wikipedia.org/wiki/Mingong)
Every country blocks competitors once it gets ahead. Britain did it with textiles, America with steel. China’s just doing it faster and more openly because it has to scale quick. Framing it as uniquely cruel misses that the ladder-pulling is the whole playbook, not the exception.