The last hútòng (胡同) I explored was in the year 2000, in the southern suburbs of Beijing. Many of its residents still wore drab green or grey uniform ‘Mao’ suits. A hútòng is a neighborhood of streets and narrow alleys separating blocks of one- or two-story traditional Chinese multi-family houses containing common courtyards. You’ll rarely find a hútòng in any populous city in China. During the past quarter century — yes, it’s been that long, most hútòngs have been razed and replaced by towering modern apartment blocks. Hundreds of thousands of hútòngs gone. During that time, China’s economy has advanced 600%; 850 million of China’s  1.4 billion people were lifted above the poverty line,  and by 2030 (only four years) it is predicted by Western analysts that 27% of Chinese adults with have college educations — that same percentage as Germans.

Meanwhile, the U.S. economy has grown 310% since 2000, the number Americans living under the poverty line has increase from 12.2% to 15.9%, and literacy has dropped to 79% to 80% — meaning that one out of every five Americans struggles to read, 21% are functionally illiterate, and half of the population reads at no better than a sixth-grade level (an 11 to 12-year old level). These declines have demonstratively shifted American politics.

In the nearly four decades 1988, only two Republicans have won the White House: George W. Bush and Donald Trump. Thoughtful, probative, and politically experienced Republican nominees as Robert Dole, John McCain, and Mitt Romney lost elections. Starting in 2008 to compensate, the Republican party largely stopped campaigning about policies that compete with those of Democrat candidates and began competing about what it calls ‘cultural’ ‘ issues: the Starbucks coffee chain no longer printing ‘Merry Christmas’ on its cups, Barack Obama wearing a brown suit, there being ‘transgendered’ athletes (perhaps hundreds of them within a nation of more than 300 million people!) competing in scholastic athletic games, about immigrants allegedly eating natives’ pets, wind turbines allegedly causing cancer, scientifically-proven human-caused climate change being a ‘hoax’, alleged Jewish ‘space lasers’ causing forest fires, about the 66% of Americans who are Christians allegedly being discriminated against by the majority of Americans, and other dingbat conspiracy theories and what I call ‘conservative twinkie’ issues that rile the gullible and illiterate among Americans into voting for whomever deceitfully utters such lies.

Hence, a minority of American voters (i.e., slightly under 50%), perhaps the 50% who read at a sixth-grade level, in 2024 knowingly and willfully voted a multiply-convicted felon and known (“rape,” the trial judge called it) sex offender into the Oval Office.

For nearly 80 In China, there is a dictatorship by one political party over that nation. No political opposition or dissent is allowed. Why have 1.4 billion Chinese citizens not overthrown that? Because 100 million Chinese Communist Party members permeate that nation, totally control the police and military, and for decades have struck an unwritten agreement with the rest of the populace: ‘allow our dictatorship and we will bring hundreds of millions of you out of poverty and make you effectively as rich as people in the world’s developed nations.’ Western experts now consider between 400 million and 700 million Chinese to be ‘middle class’.

When Chinese Communist statesman and political theorist Deng Xiaoping came to power in 1980, he radically reshaped Communist economic theory and policies. He knew China’s historical mercantile power and had studied the modern economic rises of Japan, Singapore, South Korea, and Taiwan. While keeping his political party’s dictatorship, he rejected classical (i.e., 19th Century) Marxist economic policy of a totally party-run economy and embraced economic capitalism in China. He specifically, created an economic system in which the Chinese people are free to own and run businesses, properties, and equities, yet the Chinese Communist Party still can modify the nation’s economic course if it sees fit. “it doesn’t matter if the cat is black or white, if it catches mice it is a good cat,” He remarked. It has been Deng’s economic policies that have caused China’s economy t become the world’s largest (if not yet richest) and lifted more than half of all Chinese out of poverty.

What do I mean by the Chinese Communist Party can modify that nation’s economic course if it sees fit? Deng and his fellow party members realized that China needed infrastructure yet that no startup or established Chinese company had the financial or technical wherewithal to build such infrastructure. So, the Chinese government gave ‘seed’ money to thousands of Chinese entrepreneur who wanted to start construction companies and industries. The government’s expectation was that most of these entrepreneurs, competing against one another, would fail, but that the remaining ones would prove competent and financially solid. The result was that 190,700 kilometers (118,500 miles) of superhighways have been built in China (compared to 78,680 kilometers or 48,890 miles of superhighway in the larger U.S.)  China now has 50,400 kilometers (31,318 miles) of high-speed passenger rail, compared to a mere 137 kilometers (85 miles) in the U.S. Chinese college and universities also have been beneficiaries of these policies. In the U.S., 40 percent of working age Americans have college degrees compared to nearly 27% of Chinese, yet 49% of the world’s patents last year were filed by Chinese compared to 18% by Americans.

I’m not a communist and deplore the Chinese Communist Party’s rule. In fact, I’ve seen first-hand how the rights of Chinese citizens have regressed under President Xi Jinping’s dictatorship. For example, When during 2000 I lectured at Peking University (China’s version of Harvard), no political discussions were permitted, particularly in front of foreigners such as myself. Yet when I lectured at Tsinghua University (China’s version of Yale) during 2010, Chinese faculty professors opening argued with each other about politics and human rights. But since Xi took office, things are back to where they were during 2000. Nonetheless, it was very savvy of his predecessor Deng to have realized that the economics of classical were obsolete and to adopt market capitalism run by then Chinese Communist Party. That isn’t classical communist-run economics like the Soviet Union and its satellite countries used, in which the party micromanages everything and owns everything. The failures of the Soviet Union and its satellites amply demonstrates than classical Marxist economics doesn’t work. Instead, this is communist-run capitalism; a form of state-run, non-micromanaged capitalism which has made China a developed nation, made Communist Vietnam the fastest-growing economy in the world, and earlier made developed nations the western nations of Japan, Malaysia, Singapore, South Korea, and Taiwan. (note: although Japan was rebuilt by the U.S. after World War II, it has been solely self-governing since 1960 and has since become the world’s third largest economy during the six decades since.)

My acquaintances who are American conservatives abhor the idea of the state having anything to do with the economy. They advocate the classical 18th-Century laissez-faire capitalism of Adam Smith in which governments have no roles in economies. I, however, believe that the incredible economic growth and success of China, Vietnam, Japan, Malaysia, Singapore, South Korea, and Taiwan (as well as perhaps Qatar, the United Arab Emirates, and Norway) illuminate the obsolescence of that 18th-Century economics. The state can and should take a strategic role over the tactics of the market. That role includes not just ‘keeping an even playing field’ but using governmental sovereign wealth to seed or incentivize the direction of the market. (Some of my American conservative acquaintances are nowadays actually advocating governmental strategic support for the U.S. semiconductor industry and possibly the industries behind Artificial Intelligence and Quantum Computing!)

Which brings me back to subject of Chinese automobiles. It was almost non-existent prior to Deng taking power, yet since 2009 it has been world’s largest and most competitive automobile industry. Although Detroit produces automobiles with more cup-holders, China produced technologically superior and more luxurious automobile for less cost than anywhere on the planet. Indeed, nearly half a decade ago the Chinese government foresaw electric vehicle as the world’s primary type of automobiles in the future, and poured money into startup or established Chinese automobile manufacturers who could efficiently and lucratively produce such vehicles. Last year, the Chinese manufacturer BYD surpassed the U.S. firm Tesla as the world’s largest manufacturer of electric vehicles.

My first experience with a Chinese automobile was about five years ago in Almaty, Kazakhstan’s largest city. I rode in a BYD sports utility vehicle of technological sophistication and luxury beyond what I was used to in Europe or North America. Some American kneejerk conservatives might be tempted to claim that such vehicle might not be safe. However, Volvo is now a Chinese automobile company; the Chinese auto industry manufacturers its vehicle to European safety standards; and, as a few million Australians might now tell you, Chinese vehicles don’t lack for safety.

I think (no, I know) that Chinese automobiles are far superior to U.S. for their price. Should Chinese automobile brand dealerships appear in the U.S., as they have appeared in Australia and some European nations, their competition would put most Ford, General Motors, and Stellaris (the former Chrysler) dealerships out of business. For such reasons, President Biden banned Chinese brands from the U.S. automobile market, a ban Donald Trump has continued. Traditional capitalism dictates that consumers should be given their choice of products. Yet the Republican party threw out traditional capitalism when it nominated Trump. However, what motivation do U.S. automobile manufacturers have to improve their products? Is it only the competition among themselves? Or should they compete against other nations’ automobiles, as they already do those from Germany, France, Japan, South Korea, and the U.K.? When does a ban become destructive to its own supposed beneficiaries?

You be the judge. Consider Marquis Brownlee‘s (20.7 million YouTube subscribers) review of the Xiaomi’s SU7, which is just one of the new models of automobiles manufactured in China.

What do you think of it and this international trade issue?