In a time of mounting geopolitical tension and economic decoupling, the competition between the United States and China has increasingly turned to the battleground of industrial capacity. With the return of Donald Trump to the U.S. presidency and renewed emphasis on tariffs, reshoring, and export controls, Washington appears intent on clawing back its manufacturing dominance. However, as Professor Lu Feng of Peking University recently argued in an article published on Guancha.cn (Lu, 2025), this ambition may rest on a critical misunderstanding: industrial ecosystems cannot be reconstructed by decree, especially after decades of decline.
This article explores Professor Lu’s thesis, contextualizes it in historical and economic frameworks, and draws broader implications for understanding strategic economic resilience.
1. The Illusion of Rapid Reindustrialization
The Trump administration’s renewed push to revive American manufacturing—via tariffs on Chinese goods, subsidies for domestic producers, and reshoring mandates—ignores the depth and duration of U.S. deindustrialization. As Lu (2025) notes, the decline began not recently, but in the 1970s, following a series of structural shifts: the end of the Bretton Woods system, a pivot to financialization, and the political abandonment of industrial strategy.
While slogans such as “Made in America” resonate politically, rebuilding lost ecosystems—factories, supply chains, skilled labor, and industrial know-how—requires not years but decades. Attempts like Foxconn’s failed Wisconsin plant underscore how top-down efforts without embedded systemic support tend to fizzle (Lu, 2025).
2. Financialization and the Hollowing Out of American Industry
Post-1971, after the U.S. decoupled the dollar from gold, a new regime emerged. Capital increasingly flowed into finance, real estate, and services rather than manufacturing. According to Lu (2025), this shift sidelined long-term investment in production, encouraging shareholder value maximization and short-term profit-taking.
The results were stark: entire regions, notably the American Midwest, transformed into “rust belts” as industries migrated abroad. By 2021, the U.S. trade deficit had surpassed $1 trillion, a testament to its waning industrial competitiveness (Lu, 2025).
3. Manufacturing Is a System, Not a Site
A key argument in Lu’s piece is that industrial production is not a plug-and-play operation. It is embedded in a matrix of factors: supply chains, technological ecosystems, education systems, infrastructure, and institutional memory. This complexity means that merely relocating a plant doesn’t recreate its original productivity.
This insight aligns with the work of industrial economists such as Ha-Joon Chang, who emphasize the cumulative and path-dependent nature of industrial development. Once disassembled, these systems are exceedingly difficult to reconstruct without significant and sustained intervention.
4. China’s Industrial Strength: Built, Not Bought
By contrast, China’s manufacturing ascent was neither accidental nor wholly foreign-driven. Since the 1950s, China invested in an independent and comprehensive industrial base, including heavy industries, semiconductors, and electronics (Lu, 2025). This strategy allowed China to absorb foreign investment post-1978 effectively and to climb the value chain.
An emblematic case is Northern Huachuang, a Chinese semiconductor equipment manufacturer whose roots trace back to early socialist-era factories. Between 2017 and 2023, its revenue increased nearly tenfold, demonstrating both technological maturity and scalability (Lu, 2025).
5. Avoiding China’s Internal Pitfalls: Beyond the Old vs. New Industry Binary
Lu warns that China, in pursuing its transition to a tech- and service-based economy, must not abandon its traditional industrial strengths. Over-focusing on high-tech at the expense of foundational industries could undermine its ability to resist external pressures. Instead, maintaining a full-spectrum industrial ecosystem—where traditional and emerging sectors co-evolve—is essential for long-term strategic autonomy (Lu, 2025).
Conclusion: Strategic Patience vs. Strategic Impulse
The core of Lu Feng’s argument is a powerful reminder to policymakers: real industrial power is not the product of short-term stimulus or populist rhetoric but of persistent, strategic investment over generations. The U.S., in trying to rapidly reverse 50 years of deindustrialization, may find that it has underestimated the embeddedness of manufacturing systems.
Meanwhile, China’s advantage lies not merely in scale but in the coherence and depth of its industrial architecture. As economic competition intensifies, this systemic capability may prove to be its most important asset.
References
Lu, F. (2025, May 29). 《为什么美国无法快速恢复工业，而中国能有效应对外部压力？》[Guancha.cn]. Archived at: https://web.archive.org/web/20250618165337/https://www.guancha.cn/lufeng2/2025_05_29_777566_s.shtml
Chang, H.-J. (2002). Kicking Away the Ladder: Development Strategy in Historical Perspective. Anthem Press.
Rodrik, D. (2011). The Globalization Paradox: Democracy and the Future of the World Economy. W. W. Norton & Company.
