What really keeps CHINA up at night, however, is a potential co-ordinated assault by the Trump administration, EU and Japan on their unique model of Chinese “state capitalism” that has been integral to the country’s economic success over the past 40 years.
In recent months the EU and Japan have joined forces with the US in WTO complaints against “forced technology transfers” in China through mandatory joint venture structures with local partners. “No country should require or pressure technology transfer from foreign companies to domestic companies through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes,” Mr Lighthizer, Ms Malmstrom and Hiroshige Seko, Japan’s minster for economy, trade and industry, said in a joint statement in May.
After a period when Mr Trump picked trade fights with any number of countries, Beijing worries that he has stumbled on to a more effective trade strategy that involves isolating China.
“These sorts of moves make the Chinese very nervous,” says Eswar Prasad, a former head of the IMF’s China division who now teaches at Cornell University.
h/t Digital mix guy