A senior Chinese official’s pointed remark to then-Treasury Secretary Hank Paulson in 2008 — “We aren’t sure we should be learning from you anymore” — has now been turned on its head, according to a new book urging Western governments to borrow from Beijing’s economic playbook without adopting its political model.
Chad Bown, a senior fellow at the Peterson Institute for International Economics who served as the State Department’s chief economist in the Biden administration, and Financial Times columnist Soumaya Keynes have published “How to Win a Trade War.” The book argues that protecting market-oriented democracies from China’s state-directed system requires using some of the same tools China has deployed: industrial policy, strategic stockpiling, and export controls.
“The West has no choice if it wants autonomy in some of these sectors where China has already achieved market dominance that it has now shown a willingness to weaponize,” Bown told WSJ Chief China Correspondent Lingling Wei.
The book acknowledges the risks. Bown said the bigger question is whether democracies can adopt China’s playbook “at a reasonable cost and with the fewest unintended consequences.” If not, he added, “it will be super messy.”
The authors draw on the world of “preppers” to illustrate the difficulty governments face in managing strategic reserves. They recommend establishing explicit, preset triggers for when reserves are released, and focusing on securing true chokepoints in a supply chain — raw silicon, wafers, chip assembly — rather than trying to domesticate every step.
On subsidies, Bown and Keynes use a kitchen analogy: mastering them is like baking a cake — get the ingredients wrong or pile on too much, and you end up with a mess. Their prescription calls for narrow, time-bound subsidies reserved for foundational technologies with genuine security spillovers, such as advanced semiconductors. Broad subsidy wars, they argue, create domestic inefficiencies and trigger “food fights” with allies.
The trickiest tool is export controls on cutting-edge technology. The authors deploy the analogy of managing a teenager’s relationship with “Dangerous Doug,” the neighborhood’s bad influence. Cutting off an adversary’s access to technology may accelerate their drive to build domestic alternatives, reducing leverage. The antidote, they say, is locking in allies such as Japan and the Netherlands so the target cannot shop elsewhere.
The throughline of the book is restraint. “Winning a trade war,” in the authors’ telling, “isn’t about crushing your opponent. It’s about closing your vulnerabilities at the lowest possible cost to the democratic and economic values you set out to protect.”
Wei asked Bown whether the recent U.S.-China trade truce validated or undermined the book’s argument. Bown said he reads it as proof that economic weapons can work in getting countries to change their behavior, at least in the short term. “The big question is for how long.”
The exchange between Wang Qishan and Paulson in 2008 — recounted in Wei and Bob Davis’s 2020 book “Superpower Showdown” — was at its core a claim of independence: China no longer needed to take its cues from Washington. The West now faces its own version of that reckoning, the authors suggest: how much can the U.S. borrow from China’s tactics without sacrificing the strengths that made it successful in the first place.