China’s Hidden Edge in Manufacturing.
China is embedding more service value added into its manufactured exports; the rest of the world is not.
EconomicsFinance
Richard Baldwin Substack.
Richard Baldwin on globalisation, trade, and the future of the world economy.
Recent essays
30 of 37China Won the Factory Race. America Won the Office Race.
Since 2008, China out-built America five to one in factories. America out-built China two to one in offices.
China Shock 2.0 Was Bigger Than 1.0
China’s annual manufacturing expansion was larger relative to G7 output: 6.1% versus 4.1% during the first shock.
China Shock 2.0 Is Much More Than EVs
Cars rank eighth: China’s relative production volume rose in 18 of 19 sectors; relative prices fell in 19.
China Shock 2.0 Is Intensifying. Falling Prices Hide It.
Since 2021, China’s world manufacturing share rose one point in volume but fell three points in value.
The AI Boom Is a Bet on Open Trade
AI valuations assume access to foreign clients and Chinese kit. What could possibly go wrong?
Before You Read the China Deal, Check the 2025 Trumpian Trade Deals
2025 saw lots of new trade deals without much new trade.
Do lobbyists or populists make better trade policy?
With lobbyists, it's protection for sale, line by line; with populists, it's protection for show done in bulk.
China’s Subsidies Worked; Countervailing Tariffs Didn’t
Chinese subsidies sparked scale-induced productivity gains that tariffs didn’t counter.
How America Is Retreating From Its Tariff War
The average tariff Americans pay has fallen by two-fifths.
Slowbalisation Is Mostly China
The world didn’t close. China became a mega-economy.
Who Is Losing Factory Jobs to China?
Nobody, since 2013.
Which Trade-Linked Jobs Pay More: Factory or Office?
Globally, the Office out-pays the Factory by about two-thirds per trade-linked job.
The Jobs AI Was Supposed to Eliminate Are Booming
Will ChatGPT purge back-office offshoring? The data say ‘no.’.
Chinese Exports Hid Manufacturing's Deglobalisation.
Manufacturing slowbalisation was actually delocalisation (mostly to China).
Silicon Valley Does the Work; Ireland Books the Exports; But Who Pays the Tax?
How Tax Law Handed Ireland the World Cup of Digital-Services Exports.
How America Out-Deindustrialised Europe
The EU offshored to itself, ran a manufacturing trade surplus, and then there was Ireland.
China’s Phantom Deindustrialisation
Standard measures say China is deindustrialising along with the G7. But that’s not real.
Did the Rest of the G7 Deindustrialise the American Way?
No. While America lost its appetite for manufactures, the others shifted value added shares offshore.
What Actually Shrank American Manufacturing?
Less wanted, more imported, more offshored. The first did most of the damage; the third never happened.
Did US Underproduction Cause China’s Overproduction?
“Chinese overproduction caused America’s trade deficit” and “US underproduction caused China’s surplus” are the same sentence read in opposite directions.
2025 Trade: Geopolitical Realignment or Rerouting?
China rerouting its US-bound exports is being dressed up as geopolitical fragmentation.
Is Trump Obsessed with the Wrong Exports?
Goods exports make the politics; service exports make the jobs.
The WTO Is Not in Crisis. It Has Arthritis.
The problems are not acute but treating them as such might make things worse.
Did Trumpian Tariffs Fragment America or the World Trade System?
Why the rest of the world defended rules-based trade while the US turned inward.
Why Didn’t Other Countries Copy Trump’s Tariffs?
By Richard Baldwin, Professor at IMD Business School, 8 May 2026.
World War Trade and the Strait of Hormuz
The weaponisation of trade spreads to shipping chokepoints.
When Trump Met Escalation Dominance:
The US-China Trade War Lessons for Iran
Trump’s Conduct of Trade War: What Lessons for His Conduct of Real War?
Factful Friday 17 April 2026
From Trade Architect to Trade Arsonist: America’s Journey
How John F. Kennedy’s American exceptionalism gave way to Trump’s grievance politics