China and the U.S. both gained from their economic integration. As they pull apart, each is finding it will be hard to fully replace the other.
The Chinese leader Xi Jinping with President Biden last year. The two plan to meet on Wednesday.Credit...Doug Mills/The New York Times
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Peter S. Goodman
By Peter S. Goodman
Peter Goodman, a global economics reporter, covered China from Shanghai from 2001 to 2006.
Nov. 14, 2023
For more than a quarter century, the fortunes of the United States and China were fused in a uniquely monumental joint venture.
Americans treated China like the mother of all outlet stores, purchasing staggering quantities of low-priced factory goods. Major brands exploited China as the ultimate means of cutting costs, manufacturing their products in a land where wages are low and unions are banned.
As Chinese industry filled American homes with electronics and furniture, factory jobs lifted hundreds of millions of Chinese from poverty. China’s leaders used the proceeds of the export juggernaut to buy trillions of dollars of U.S. government bonds, keeping America’s borrowing costs low and allowing its spending bonanza to continue.
Here were two countries separated by the Pacific Ocean, one shaped by freewheeling capitalism, the other ruled by an authoritarian Communist Party, yet conjoined in an enterprise so consequential that the economic historian Niall Ferguson coined a term: Chimerica, shorthand for their “symbiotic economic relationship.”
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No one uses words like symbiotic today. In Washington, two political parties that agree on almost nothing are united in their depictions of China as a geopolitical rival and a mortal threat to middle-class security. In Beijing, leaders accuse the United States of plotting to deny China’s rightful place as a superpower. As each country seeks to diminish its dependence on the other, businesses worldwide are adapting their supply chains.
Rise and Fall of World’s Most Successful Joint Venture
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