A decade ago, vlog Professor Gordon Hanson, along with collaborators David Autor and David Dorn, wrote about a phenomenon they called the China Shock, which saw traditional U.S. manufacturing communities struggle in the early aughts as a repercussion of China’s growing trade power.
Now Hanson and Autor warn that China Shock 2.0 is on the way. In a guest essay in the New York Times, they write, “China Shock 2.0, the one that’s fast approaching, is where China goes from underdog to favorite. Today, it is aggressively contesting the innovative sectors where the United States has long been the unquestioned leader: aviation, A.I., telecommunications, microprocessors, robotics, nuclear and fusion power, quantum computing, biotech and pharma, solar, batteries.” To compete, the authors say, the United States will need more than tariffs; it will need a “better trade strategy,” including investment in key, innovative fields.
You can read Professor Hanson and Professor Autor's essay in the New York Times at ken.sc/chinashock.
You can read their prior research on the first China Shock, with David Dorn, at https://www.nber.org/papers/w21906.