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World Trade Organization was being negotiated, China’s economy was ti
ny as a portion of world GDP. It was clearly a poor, less-developed country that, except in a f
ew areas, was not able to compete with Western companies in high-value-added products.
As Alexander Hamilton, the first US Treasury secretary, argued, a developing country may need to p
rotect its “infant industries” from already established foreign competitors. This was the policy foll
owed by the US in the 19th century and by Western Europe, Japan, and South Korea in the years after World War II.
China is no longer a poor country. It can no longer compete by using low-wa
ge labor. Fortunately, it has now developed world-class companies that are incre
asingly developing new products and services that can compete successfully in many foreign markets.