Vincent Deluarde argues that China’s industrial policy has been successful enough to force a global rethinking of capitalism, and that the West — especially the U.S. — is now borrowing parts of the Chinese playbook. He frames the issue less as a new geopolitical era than as an old debate between free trade and state-led development, updated for batteries, AI, drones, and semiconductors.
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The core thesis is that China’s rise has changed how governments think about industrial policy because its state-backed model has delivered visible industrial and trade success. Vincent Deluarde says the Chinese approach resembles Friedrich List’s 19th-century arguments for protecting nascent industries, restricting imports, and using the state to build industrial capacity. In his view, China has done this effectively enough that the West, especially the U.S., has begun copying parts of the model. He supports that view by pointing to China’s gains across a range of strategic sectors: rare earth processing, batteries, drone technology, robotics, AI, and biotech. He also cites China’s “trillion dollar current account surplus” as evidence that its products are in demand abroad and that the model has produced real external competitiveness. …
Immediate setup is policy-driven rather than price-driven: the relevant near-term risk is continued U.S. intervention in strategic sectors, which can keep semis, batteries, and trade-sensitive names in focus. There is no explicit tactical call here, just a warning that the government’s hand is becoming a more active market force.
Over the coming weeks and months, the base case is that industrial policy stays central in both the U.S. and China, with investors rewarding capacity, supply-chain control, and export strength. That view would be challenged if China’s domestic stresses start constraining execution or if Western policy reverses back toward cleaner free-trade logic.
The long-run implication is a more interventionist global capitalism where states play a larger role in building national champions and securing industrial autonomy. China remains the reference model, even for critics, because it has demonstrated that strategic state direction can reshape competitive advantage for years at a time.
China's state-led industrial policy model has been highly successful, producing the greatest economic miracle in human history in terms of living standards and public investment.
The speaker points to aggregate living standards, public investment, and China catching up or surpassing advanced economies in batteries, drones, robotics, AI, and biotech.
The US is adopting parts of China's activist industrial policy playbook, including the CHIPS Act, IRA, trade tariffs, and direct government stakes in companies like Intel.
The speaker cites specific US policies — CHIPS Act, IRA, Trump trade tariffs, and government taking a stake in Intel — as evidence the US is intervening more openly in business.
The nature of warfare is shifting such that industrial capacity to mass-produce cheap technology (like drones) can overcome superior technology, which favors China's industrial strength.
The speaker argues that aircraft carriers are vulnerable to drone swarms and that even the best missile defense can be exhausted by cheap waves, making industrial capacity more important than cutting-edge tech.
Do you think that China has fundamentally changed the way governments think about industrial policy?
Vincent says the rise of the Chinese model has led to a rethinking of industrial and trade policy, drawing parallels to the 19th-century debate between Ricardo (free trade/comparative advantage) and Friedrich List (state-led investment, import restrictions, protection of nascent industries). He argues China is adopting the List playbook with similar results — Germany overtook Britain's industrial output within 50 years.
How successful has China's model actually been?
Vincent acknowledges there have been misses but calls it the greatest economic miracle in mankind. In specific sectors — rare earth processing, batteries, drones, robotics, AI, biotech — China has caught up or surpassed advanced economies. He points to China's trillion-dollar current account surplus as evidence its products are desired abroad.
Do you think that the West is now copying parts of China's strategy?
Vincent says by 'West' he mostly means the US. The EU has only incantations with little action. US activist industrial policy started under Biden with the CHIPS Act (semiconductors) and the IRA (batteries/clean tech). Trump rolled back some measures but doubled down on others, especially trade policy. He notes the US government taking a stake in Intel and actively telling businesses what they can export — a much greater merging of government and private sector interests.
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