GVPT Distinguished Professor Margaret M. Pearson and her coauthor Joshua P. Meltzer, have published a new article in Brookings titled, "How the US should address Chinese overcapacity and its impact on international trade."
The article explores the challenges posed by China's overcapacity, a key issue arising from its mercantilist approach to trade. Pearson and Meltzer discuss how this stems from a complex Chinese policymaking system that tolerates weak domestic demand while continuing to prioritize investment in manufacturing. They argue that the next U.S. administration should focus on identifying areas of the economic relationship with China that need restriction for national or economic security. At the same time, they call for rebuilding a global, rules-based trading system that is fit for purpose in an era where the largest exporter is also a geopolitical competitor. The authors advocate for a principled, risk-based approach to trade with China, ensuring that high-risk sectors are addressed while maintaining trade in lower-risk products.
Read the full article: How the US should address Chinese overcapacity and its impact on international trade
