by Lawrence Freeman
A recent article published by the Peterson Institute for International Economics (PIIE) conveniently ignores the historical burden imposed on low- and middle-income countries (LMICs) under the United States-led "rules-based order" following World War II.
The paper is riddled with historical distortions in a deliberate attempt to prove the authors' presumption: China's exports are responsible for crowding out space for the LMICs to develop their local manufacturing capacity. As a specialist in the political economy of sub-Saharan African nations and China-Africa relations, I can provide some light on this misleading narrative. While it is true that Africa-China trade reached a historically high level of 348 billion U.S. dollars in 2025, with African countries running a trade deficit of 102 billion dollars, the more important question is: how did this imbalance emerge?
Here the historical weakness of the paper under review is revealed. The opening sentence begins with a falsehood: "In the United States, President Donald J. Trump's tariffs have drawn political force from the view that China's surplus hollowed out American manufacturing."
This is completely untrue. The U.S. willfully destroyed its own manufacturing sector beginning in the 1980s, when it adopted the policy of becoming a post-industrial society. The U.S. establishment decided at that time it would move away from being a manufacturing-based industrial society in favor of becoming the center of the financial world, with an expanding service sector, except for the production of armaments.
This was advertised in the Council on Foreign Relations magazine, Foreign Affairs, and implemented by then-Federal Reserve Chairman Paul Volcker. At that time, China had no strong manufacturing capability. It neither possessed the ability to challenge the United States nor contributed to the shrinkage of America's once powerful manufacturing sector.
Let us keep in mind the reality of the world economy: in the 1960s, the United States functioned as the world hegemon, leading the "rules-based order," with a GDP around 10 times that of China's. This only started to change in the late 1970s and early 1980s with the reform and opening-up drive led by Deng Xiaoping, which kicked off in China over the next forty years the greatest economic miracle that our planet has seen.
Again, taking Africa as an example, the United States and the West were in total control of the so-called free markets. The United States and the West had total control over the nations of Africa both politically and economically, as they did over much of the developing sector. China did not emerge as a major player in African economies until the 2000s. During the 1960s, 1970s, 1980s, and 1990s, the United States and the West ruled the financial institutions, including the IMF and World Bank, and they did nothing to build up the manufacturing capability of Africa. This is the truth, and this is egregiously absent from the PIIE report.
During that time there was no leader, except President John F. Kennedy, who was concerned to develop manufacturing capabilities in less-developed countries, especially Africa. What was done by the West, by the U.S., by the "rules-based order" was to extract wealth from African nations. Looting their natural resources, not development. This cannot be blamed on China.
Western policy never genuinely aimed to integrate Africa into the global manufacturing supply chain. Consequently, African economies today account for only about 3 percent of globally traded manufactured goods. This outcome is not a result of China crowding out lower-income countries' industrial space. Rather, it is an uncomfortable reality that the PIIE and its ideologues are unwilling to confront, as acknowledging it would undermine their anti-China narrative, which is precisely why this factor is conspicuously absent from their report.
Africans suffer, actually die, from the lack of electricity, due to the willful decision not to invest in infrastructure by the West. This is what has prevented African nations from developing manufacturing capabilities. The lack of railroads is another element that is holding back the economic growth of African economies. Not China.
The failure to invest in the most critical component of an economy: infrastructure. This is the cause of the economic deficiency of African nations. Without infrastructure, you will not have a manufacturing sector. You will not have an industrialized economy. It is not the result of China squeezing Africa out of the market. The problems we have today in the LMICs, especially in Africa, are a result of willful decisions by the West not to develop these nations. This cannot be covered up by using mathematical formulas or refusing to report on what actually happened to the developing sector during the decades from 1960 through 2000, before China's economy began to be a serious actor in the world economy.
"When the United States was the world's economic hegemon after World War II, it created manufacturing and export space for others -- first Japan, then the Asian Tigers, and eventually China itself," claimed the authors in the conclusion part. However, there was never any intention by Western financial institutions to develop manufacturing capacities for low-and middle-income countries, and little to no investment in vital categories of infrastructure, which are necessary to build a robust manufacturing sector.
The most irreconcilable historical reality that the authors failed to address in the narrative accusing China of preventing the development of the LMICs is this: From the 1940s until the year 2000, when China began to emerge as a successful economic power, the Western political-financial oligarchy had dominant control over the world economy. They, not China, failed to promote economic development in the LMICs for six decades.
China, to its credit, has advanced infrastructure development across our planet through its Belt and Road Initiative (BRI). It is unarguably the case that in Africa, without the BRI, the conditions of life for the majority of Africans would be much, much worse. To this day, no American president has joined or agreed to participate in the BRI, the largest global infrastructure program the world has ever undertaken.
Editor's note: Lawrence Freeman is a U.S. political-economic analyst for Africa, who has been involved in economic development policies for Africa for over three decades. He is also a geopolitical analyst of U.S.-China relations.
The views expressed in this article are those of the author and do not necessarily reflect those of Xinhua News Agency.
