Anne Stevenson-Yang | China's Position as an Economic Powerhouse, The US Election, & Whether Alibaba is a Good Investment Target

<p>Today on The Negotiation, we speak with Anne Stevenson-Yang, Co-Founder and Research Director of J Capital Research.</p><p>China’s manufacturing industry developed in three stages: cheap labor, superseded by cheap IP, superseded by cheap capital. What has brought foreign businesses to China is not so much the low-cost of labor as the low-cost of capital. Anne says that the average American citizen has not been hurt by the competition from cheap labor, “but the way in which the U.S. political system has recycled the profits from China back into the pockets of the top 1% of the population” rather than investing in American infrastructure, education, equipment, etc.</p><p>Anne does not believe that there will be a decoupling of manufacturing. Rather, there will be a joining and a strengthening of a lot of international institutions that will allow the U.S. to force China into negotiations instead of fanning the flames of hostility as per usual. However, there is a lot of doubt that China will be capable of participating in these institutions because their system is fundamentally different from those of other big economic players. For instance, Anne considers the Belt and Road Initiative to be another manifestation of China’s desire to plant its roots around the world while staying fundamentally unchanged in its development model.</p><p>China’s coupling with the international world starting in 1979 was a deliberate strategy done to capture as many resources as possible, which included technological expertise, intellectual property, and capital. This was carried out in order to make China “as presentable and as like America as possible, enough that those benefits would start to flow into China.” Today, that process has more or less reached its peak, resulting in marginal returns.</p><p>Says Anne, “I think that China is rapidly fading from the international scene as an economic player of great importance, and I think that’s going to continue to happen. It is not because of U.S. decoupling. It is because tha