Journalist David Lynch’s The World’s Worst Bet is like a disaster movie. The Washington Post correspondent (formerly at the FT) opens his book with one senior politician after another asserting, as if to camera, that China’s imminent membership of the World Trade Organization in 2001 presented no threats, but only opportunities. China, said Joe Biden said at the time, was “a nation with the impact on the world economy about the size of the Netherlands”. It was absurd to think it would have any impact on the American manufacturing economy.
Lynch quotes a seemingly endless list of eminent senators reassuring American taxpayers, workers and themselves that a world of joyous happiness lay ahead. “Expanding trade,” said one, “will lead China into democracy, into freedom.” “Capitalism corrodes communism,” said another, with complete conviction. It was not just politicians who got it wrong. Once per capita income reaches $7,000 said one economist, China will become a full-grown democracy. Bringing China into the global trading system, claimed 13 Nobel laureates (alongside scores of their colleagues) would “advance the rule of law” in China and “promote economic development and freedoms” there. Opening up to China, said veteran national security adviser Brent Scowcroft, “may be one of those rare occasions on an important issue where there’s virtually no downside”.