Former World Bank economist critiques Western protectionism amid China’s industrial ascent, urging systemic industrial policy reform over ‘Eastern wisdom’ rhetoric

Indigenous economic models, such as communal land tenure or reciprocal labor systems, are not directly relevant to the industrial policy debate, which centers on state-led capital accumulation. However, critiques of extractive industrialization in Indigenous communities (e.g., lithium mining in the Andes) highlight the environmental and social costs of rapid industrial expansion, a dimension missing from Lin’s framing. Traditional knowledge systems often prioritize ecological balance over GDP growth, offering a counterpoint to the linear industrialization narrative.

The U.S. and Germany both pursued aggressive industrial policies in their developmental stages, from Hamilton’s Report on Manufactures (1791) to Germany’s post-war ‘Wirtschaftswunder’ under Erhard. China’s industrial ascent mirrors Japan’s post-1945 strategy, where state-directed credit and protectionism enabled rapid catch-up. The ‘overcapacity’ narrative echoes 19th-century British complaints about German and American industrial competition, revealing a pattern of hegemonic resistance to rising powers.

In South Korea, the chaebol system—backed by state banks and industrial policy—was pivotal in transforming Samsung and Hyundai into global giants, much like China’s SOEs today. African nations like Ethiopia have adopted similar state-led models to industrialize, though with mixed results due to neocolonial financial constraints. The ‘Eastern wisdom’ trope risks flattening these diverse historical and cultural contexts into a monolithic ‘Asian model’ that obscures local variations and failures.

Empirical studies, such as those by Ha-Joon Chang (*Kicking Away the Ladder*), demonstrate that advanced economies used industrial policy to climb the value chain, contradicting free-market orthodoxy. Research on China’s industrial policy (e.g., Naughton’s *Growing Out of the Plan*) shows how state-directed credit and subsidies drove export growth. The ‘overcapacity’ claim lacks rigorous definition, as surplus capacity is a normal feature of dynamic industries (e.g., semiconductors).

Artistic critiques of industrialization, from William Blake’s *Jerusalem* to Ai Weiwei’s *Straight*, highlight the human cost of unchecked economic growth. Spiritual traditions like Buddhism emphasize moderation and interdependence, challenging the linear progress narrative of industrial policy. The ‘Eastern wisdom’ rhetoric often appropriates spiritual or philosophical concepts (e.g., Confucian harmony) to justify materialist industrial strategies, stripping them of their ethical roots.

Scenario modeling suggests that reactive protectionism (e.g., tariffs on Chinese EVs) could trigger a global subsidy war, destabilizing supply chains and accelerating deglobalization. Alternative models, such as circular economies or degrowth transitions, are rarely discussed in mainstream industrial policy debates. China’s focus on green tech (e.g., EVs, solar) may outpace Western firms if subsidies and R&D investments are sustained, reshaping global industrial leadership.

Workers in both China and the West face precarity amid industrial shifts, yet their voices are excluded from the ‘overcapacity’ debate, which frames competition as a zero-sum game. Small businesses in Europe and the U.S. struggle to compete with state-backed Chinese firms, but their lobbying power is dwarfed by corporate interests. Marginalized communities in lithium-rich regions (e.g., Chile, Congo) bear the brunt of extractive industrialization, with little input into global supply chain decisions.