Chapter 20
The Drug Element in China-US Relations

II. The Distortion of Free Trade

Joseph Stiglitz, a renowned American economist, Nobel laureate, and chairman of the Clinton administration’s Council of Economic Advisers, was interviewed by the British Financial Times. The article was published on April 29, 2024.

Discussing the recent trade frictions between China and the United States, Stiglitz pointed out that the root cause is that “America never anticipated a competitor like China,” and therefore, “the problem is not China violating trade rules, but that the U.S. made a strategic error.” He gave an example that in the field of electric vehicles, China had a strategic plan more than a decade ago, while the U.S. took no action.

Joseph E. Stiglitz, aged 81, is a well-known American economist who has served as an economics professor at Yale University, Stanford University, Columbia University, and other institutions. From 1993 to 1997, Stiglitz served on the Council of Economic Advisers in the Clinton administration, initially as a member and later as chairman; from 1997 to 1999, he was the World Bank’s Senior Vice President and Chief Economist.

He is credited with making major contributions to the founding of information economics, and in 2001 he was awarded the Nobel Prize in Economics for his outstanding research on “analysis of markets with asymmetric information.” He holds the view that because market participants face “information asymmetry,” markets do not function perfectly, and therefore governments and other institutions must cleverly intervene to maintain normal market operations.

In 2002, Stiglitz published Globalization and Its Discontents. The book sparked controversy due to its critique of the International Monetary Fund (IMF) and international trade rules, and it also elevated Stiglitz’s fame.

However, when asked whether he considers China a constructive participant in global trade, Stiglitz responded that he does not fully understand China. In this way, he shirked his historical responsibility. He also criticized the bipartisan U.S. government, saying, “Ironically,” since 2019, the U.S. has blocked the appointment of new judges to the World Trade Organization’s appellate body, “so we have no formal legal channel to determine whether they are violating rules.” Stiglitz then lamented that the fundamental problem is that the U.S. did not foresee a competitor like China. He hypothesized that even if Chinese companies do not receive subsidies at home, “they might still stand out in competition because of their economic scale and number of engineers.”

As an official in the Clinton administration, Stiglitz has never reflected on his own part in the crimes committed, namely conspiring with a tiger (China) and tolerating the global consequences of the June Fourth massacre, participating in building the Communist Party’s sweatshops that exploit the people… all under the guise of “world trade”! But clearly, this is a distortion of free trade and a replay of “Roosevelt helping Stalin strengthen the Soviet Union.”