I do not buy James Crabtree’s reductio ad Trump argument for the risks to developing Asian economies expressed in his op-ed at Nikkei Asian Review than I do the closely related reductio ad Washington argument:
The report outlines a range of risks that could weigh on poorer and lower middle income nations, but two stand out in particular. The first is rising protectionism, as prospects dim for future trade liberalization and U.S. President Donald Trump threatens punitive tariffs against China and others. The second, and arguably the more worrying, relates to manufacturing, which allowed earlier generations of Asian workers to move from farms to basic factories and onward to advanced exporting sectors, raising productivity along the way.
I think that a better explanation is that China has built enormous overcapacity, that overcapacity crowds out other countries trying to use the same export-based strategy that was successful for Japan, South Korea, and China, and the American consumer has run out of gas.
Trade liberalization for these countries should start at home. If they weren’t all maintaining one-way autarkies, trade amongst themselves could provide the growth engine they need.
Shorter: a China without a faster-growing domestic market that imports is a drag on the entire developing world.