Many policy experts have worried than China’s economy will surpass the economy of the United States. If we lived in a world of totally free trade, I would not care if this happened. Economics is not a competitive sport where one team can win only if another team loses. A free economy is not a zero-sum game. If you are OK with me mixing metaphors: a rising tide really does lift all boats. (Amar Bhidé (quoting Paul Krugman, if memory serves) does a good job of making this point in The Venturesome Economy.)
But even though it wouldn’t bother me, China’s economy will not surpass that of the United States if China continues to oppressively regulate its economy and we continue to exuberantly unregulate our economy. An economy thrives when entrepreneurs thrive and entrepreneurs thrive when unregulated.
Consider the recent hand-wringing over the recently announced DeepSeek Chinese A.I. program. The Chinese Communists will be especially energetic in regulating entrepreneurs in the A.I. sector because the Communists cannot afford to have Chinese A.I. programs giving true answers to questions in any way related to the Chinese economy, or to the corruption and authoritarianism of the Chinese Communist regime. A.I. policy expert Barath Harithas understates the situation when he says: “Overregulation and the need to adhere to ‘core socialist values’ could risk neutering A.I.’s potential” (as quoted in Pierson and Wang 2025, p. A4).
Barath Haritas’s statement on overregulation of A.I. in China can be found in:
(Note: the online version of the article has the date February 2, 2025, and has the title “DeepSeek Is a Win for China in the A.I. Race. Will the Party Stifle It?”)
The book by Amar Bhidé that I praise in my initial comments is:
Bhidé, Amar. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Princeton, NJ: Princeton University Press, 2008.