The China "Threat"

To reduce it, engage with China more, not less.

Across the political spectrum, politicians and voters seem to believe that China threatens the United States, both militarily and economically. Both conservatives and liberals, therefore, endorse policies that aim to ameliorate this threat. Alas, these interventions weaken the U.S. relative to China.

The obvious example is trade policy. The China tariffs imposed by former President Trump, and continued by President Biden, hurt the U.S. economy by raising the prices of intermediate goods that we buy from China. The retaliatory tariffs that China imposed harm the U.S. as well.

Similar considerations apply to immigration policy. The best way to speed America’s technological progress relative to China’s is to expand the number of Chinese students, scientists, and engineers who can study here or immigrate longer term (e.g., on H1-B visas). Some of these immigrants might be spies who attempt to steal technology and relay it to China’s military. But China has many ways to learn our “secrets,” so the U.S. still loses from restricting immigration.

Other policies that aim to counter the risks from China (the CHIPS and Science Act, Tik Tok bans), will also do little to slow Chinese espionage, instead shifting its form while harming U.S. economic efficiency, reducing liberty, and rewarding crony capitalism.

A key libertarian theme is that well-intentioned government interventions are often worse than the problems they aim to address. Some Chinese politicians, and citizens, do seem to wish the U.S. harm, so Americans have a legitimate concern.

Any attempt to address this concern, however, should rest on convincing evidence the intervention will do more good than harm. That is not the case for restrictions on trade, immigration, or other kinds of peaceful engagement with China.