Domestic industries DO compete - both with each other AND with foreign companies which are levied with tariffs.
One of the reason why China's import substitution was almost unreasonably effective was because domestic companies were driven to compete fiercely with each other.
(In America there is a drive to do the opposition- wall street likes consolidation and oligopolies)
And yeah, once your national industrial ecosystem is sufficiently powerful most countries suddenly get religion about removing all tarriffs everywhere. This is what America was like in the 90s - and they were just as obnoxious about that as they are about this - the exact opposite.
The US outsourced to China because of cheap labor, not because Chinese products are good--precisely because US companies were competing with each other and needed ways to reduce prices and improve margins.
That this ultimately had the effect of diminishing the manufacturing base in the US doesn't speak to the ability of US or Chinese companies to compete.
China is a centrally planned economy. To argue it's more competitive than the US is again not tenable.
>The US outsourced to China because of cheap labor
Yeah, in 2003. The US offshores to Bangladesh or vietnam for cheap labor now and has for a long time.
Manufacturing is offshored to China simply because it cant be done in the US at anything resembling a reasonable cost, not because labor is cheaper. That is because the Chinese industrial ecosystem is unparalleled.
>China is a centrally planned economy. To argue it's more competitive than the US is again not tenable.
The economic dogma of the late 90s is getting a little long in the tooth now. Not least because it was completely blindsided by the rise of China.
It turned out that the most effectively run economies were a hybrid of distributed and centrally planned (China has open internal markets while credit allocation is largely centrally planned).
One of the reason why China's import substitution was almost unreasonably effective was because domestic companies were driven to compete fiercely with each other.
(In America there is a drive to do the opposition- wall street likes consolidation and oligopolies)
And yeah, once your national industrial ecosystem is sufficiently powerful most countries suddenly get religion about removing all tarriffs everywhere. This is what America was like in the 90s - and they were just as obnoxious about that as they are about this - the exact opposite.