Transcript | Industrial Policy, "Overcapacity," and U.S.-China Trade: A Conversation with Cambridge's Jostein Hauge

Below is a complete transcript of the episode. Thanks to CadreScripts for their great work, to Oana Grigor and Natalia Polom for checking and formatting, and to Zhou Keya for the image! Listen in the embedded player above.

Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China. In this program, we’ll look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.

I’m Kaiser Kuo, coming to you from my home in Chapel Hill, North Carolina.

Sinica is supported this year by the Center for East Asian Studies at the University of Wisconsin-Madison, a national resource center for the study of East Asia. The Sinica Podcast will remain free, but if you work for an organization that believes in what I’m doing with the show, please consider lending your support. You can get me at sinicapod@gmail.com. And listeners, please do support my work at sinicapodcast.com. Become a subscriber and enjoy, in addition to this show, the complete transcript of it, essays from me, as well as writings and lots of other podcasts from some of your favorite China-focused columnists and commentators. Do check out the page to see all it’s on offer and consider, again, helping me out. Be sure also to check out the new China Talking Points, our new show. It’s available on YouTube and streaming live every other Wednesday.

“I’m shocked at how blatantly accepted it’s become to hold anti-China views in the West,” my guest today has written more than once on X, I guess, neé Twitter. That sentiment, something with which I absolutely agree, certainly caught my attention. It’s really validating to hear someone who isn’t steeped in the whole world of China analysis, who has a little distance, but who works in a field that is certainly adjacent and wholly relevant, to hear somebody like that saying this about the state of the discourse on China in the West.

Yeah, “the West,” it’s a problematic word. But here, and pretty much whenever I use the word, I mean Western Europe, Great Britain, its colonial offshoots, you know.

The author of that tweet was Jostein Hauge, a Cambridge political scientist whose focus is on development studies. I started exploring some of his work. I read his book, The Future of the Factory: How Megatrends are Changing Industrialization, and I started paying much closer attention to how he was contributing to the conversations online about trade, about overcapacity, about industrial policy, and the Chinese political economy.

And I really liked what I saw. Since this show is about how we think and talk about China, and in Jostein, I saw somebody who is willing to challenge what he was seeing out there, and who, by my lights, models a pretty darn good way to think and talk about China, I reached out. And happily, Jostein was able to make time. And so here he is, Jostein Hauge, welcome to Sinica.

Jostein Hauge: Thank you for having me, Kaiser. It’s a pleasure to be here.

Kaiser: It’s an honor to have you. Since this is your first time on the show, your work might not be super familiar to a lot of our listeners. Perhaps you could do a little bit of a self-introduction. Talk about maybe how you started wading into the China conversation.

Jostein: Yeah. So, my work is at the intersection of development economics and international political economy. And I have a special interest in the role of manufacturing and production in the economy, especially internationally, and obviously keeping an eye out on countries that are industrializing, industrializing fast. I’m very interested in the process of development as a process of industrialization. Right? And also-

Kaiser: So, China, obviously.

Jostein: China, obviously, yeah, the role of trade in that. So, although I don’t fall within the China Studies club, right? Or area studies specifically focusing on China, over the years, I’ve really become interested in what’s happening in China in terms of industrialization, industrial policy, the role of the state in economic change, China’s changing role in trade, and so on. So, that’s really my segue into China.

Kaiser: So, you’re a son of eternal darkness. You’re from northern Norway originally, huh?

Jostein: A son of eternal darkness during the winter and the son of eternal sunshine during the summer.

Kaiser: Yeah. And then, you’re now in Cambridge. So, I mean, that must seem positively bright and sunny compared to where you grew up.

Jostein: Yes. I don’t understand why people complain about the bad weather in the UK, I really don’t. It’s amazing.

Kaiser: Yeah, well, people will complain, as they do, as you’ve noticed, you know, you said you were shocked at how completely normalized anti-China sentiment is in Western discourse. And I wanted to start with that and talk a little bit about that. It’s something I’ve talked about an awful lot and that I think many of us inside the field also lament. But, as I said, it’s good to hear from somebody who isn’t just so immersed like we are. So, what do you see — this is a tough question — but what do you see as the root causes of this mainstreaming of hostility? How much of it is grounded in economic anxiety versus ideological antagonism or just plain old great power competition and fear of being surpassed by a peer competitor? What is it?

Jostein: I think it’s a mix of all those things. But I want to start with culture and the perspective that people come with based on where they are from and where they grew up, and what they’ve seen in the world. Right? I work on development, and I’ve been in a lot of countries, and I’m especially interested in seeing developing countries emerge economically and politically. And I think sometimes there is a bias, subconscious bias, especially among people in wealthy countries, that the natural state of affairs is that the wealthy countries should be on top of the world economically, politically, culturally. It’s a little bit questioned, but I think it needs to be more questioned. So I think that’s part of it in northern Europe, in the United States, right?

Kaiser: Yeah, it’s just sort of this assumption that this is the natural order of things. Right.

Jostein: Yes, yes. This is the natural order of things. And, yeah, we should get deeper into that during just this conversation on how the world economy is really organized by and for the wealthy states. But, as you say, of course, this also has to do with China emerging as a competitor and as a threat. Right? It seems like in the wealthy part of the world, we’re kind of okay with the idea of development and eliminating poverty, as long as it doesn’t threaten us, in economic terms, as competitors.