In the waning days of 2025, as global markets grapple with rising uncertainty, a document from Beijing has emerged as a beacon of free-market economic logic and rationality, inspiring hope for a more open and efficient future.
Adopted on October 23 by the Communist Party of China’s Central Committee, the recommendations for the 15th Five-Year Plan of China outline a vision of high-quality development through deepened reform, opening up and a market economy tempered by effective governance.
This blueprint, with its emphasis on fostering an efficient, rules-based marketplace, stands in stark contrast to the protectionist follies perpetuated by US President Donald Trump during both his presidencies—and, regrettably, echoed by his first term successor Joe Biden from 2021-2024. It is a compelling blueprint for how openness and cooperation can lead to shared prosperity, offering hope for a more balanced global economy.
From a microeconomic vantage point, Trump’s approach is not just misguided; it is an act of economic self-sabotage that fragments markets, inflates costs and risks global instability. China’s plan, by contrast, embodies the logical pursuit of efficiency, resilient supply chains and sustainable growth, making it a model worth emulating.
At its core, the Chinese plan recommits to a socialist market economy where the market plays the decisive role in resource allocation, guided by a “well-functioning government” (section II, paragraph 5).
This aligns with fundamental microeconomic principles, including comparative advantage, unfettered competition and undistorted price signals. By pledging to eradicate local protectionism and build a unified national market (section V, paragraph 17), Beijing aims to eliminate barriers that impede the optimal flow of resources.
In microeconomic terms, this minimizes deadweight losses—the inefficiencies that arise when markets are segmented or distorted, highlighting the importance of efficient markets for economic well-being.
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Consumers benefit from lower prices that reflect true costs and preferences; producers, spurred by competition, invest in innovation. For instance, shortening the negative list for foreign investment and ensuring transparent, predictable rules (section VII, paragraph 23) facilitates efficient capital allocation, bolstering global supply chains.
This is no mere rhetoric: it promotes specialization, in which countries trade based on their strengths, yielding Pareto improvements—gains for all without harming any. Such openness is not isolationist navel-gazing but a catalyst for global welfare.
China’s commitment to green and digital trade (section VII, paragraph 22) addresses externalities such as environmental degradation and information asymmetries, thereby further enhancing efficiency.
By integrating services and fostering high-standard free trade areas, the plan aims to reduce transaction costs and scales economies, allowing firms to thrive in a competitive ecosystem. This is basic economics, where undistorted markets maximize consumer and producer surplus, driving innovation and growth.
Beijing’s vision thus positions China as a responsible steward of globalization, extending benefits to developing nations through initiatives such as the Belt and Road Initiative, which at least in theory knit together supply chains for mutual prosperity.
Enter Trump, whose protectionism represents the antithesis of this logic through crude, short-sighted nationalism masquerading as strategy. His 2018 tariffs on steel and aluminum, ostensibly for “national security,” exemplify economic malpractice.
In microeconomic parlance, these levies shift the import supply curve upward, inflating prices and eroding consumer surplus. Downstream industries—automobile manufacturers, construction firms—face ballooning input costs, diminishing their competitiveness and forcing a misallocation of resources away from sectors of true comparative advantage.
The result? Profound deadweight losses occur when society forgoes potential economic welfare by squandering resources on inefficient domestic production.
Federal Reserve research bears this out. A 2019 study found that the 2018-2019 tariffs were linked to relative declines in manufacturing employment, with retaliatory measures exacerbating the pain.
Another analysis from the Minneapolis Fed in 2025 tallied “modest job losses” from the US-China trade war, underscoring how Trump’s bluster and protectionism translated into real economic harm.
Trump’s sanctimonious invocation of security to justify bans on Chinese firms like Huawei and SMIC is equally pernicious. These restrictions not only hike transaction costs but dismantle economies of scale, stifling innovation across borders.
American consumers pay dearly for pricier goods, while industries curtail R&D investments amid uncertainty. Far from bolstering security, this approach has accelerated China’s self-sufficiency in high-tech, turning a supposed victory into a strategic own-goal.
Trump’s “America First” mantra, reprised in Biden’s continuity, fragments global markets, breeds monopolies and oligopolies and fosters rent-seeking in protected sectors. It flouts America’s own antitrust traditions, allowing inefficiency to fester under the guise of patriotism.
The irony is profound and damning. Here is China, the supposed command-economy holdout, advocating multilateralism and openness (section VII, paragraphs 21-24), while America, the beacon of free enterprise, erects trade barriers. Adam Smith’s invisible hand, meant to guide open markets, is shackled by Trump’s tariffs, which prioritize control over efficiency.
Ideological labels have inverted: Beijing’s regulated vibrancy—complete with antitrust enforcement and quality oversight (section V, paragraph 17)—nurtures healthy competition, whereas Washington’s distortions foster monopoly tendencies.
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Trump’s policies, by design, exacerbate inequalities, burdening consumers and small businesses while enriching entrenched vested interests. They undermine the very capitalist ethos America claims to defend, revealing a hollow core of hypocrisy.
Western critics might dismiss China’s plan as propaganda, but its microeconomic soundness is undeniable. By emphasizing innovation through integrated education, science and talent development (section IV), Beijing fosters human capital formation that drives productivity and technological leadership. Contrast this with Trump’s isolationism, which starves industries of global talent and ideas, dooming them to stagnation.
China’s plan’s push for a “community with a shared future for humanity” (section XV, paragraph 60) is not empty sloganeering; it is a pragmatic call for re-globalization, including active participation in multilateral trade agreements and initiatives like the Belt and Road, which promote inclusive economic development across the Global South and Global North alike.
Trump’s alternative? A zero-sum worldview that sows division, erodes trust in institutions and accelerates the costs of de-globalization. World leaders should heed this lesson. Trump’s protectionism risks consigning America to irrelevance, its economy hobbled by self-inflicted wounds.
Beijing’s blueprint, conversely, charts a path to sustainable growth, proving that openness, not isolation, is the engine of economic progress. In this topsy-turvy era, the true “market evangelists” reside in Zhongnanhai, not the White House.
Policymakers everywhere should pivot toward cooperation, lest they perpetuate the folly of fragmentation. The global economy’s future hinges on it.
Bhim Bhurtel is on X at @BhimBhurtel
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Bhim Bhurtel
Bhim Bhurtel teaches Development Economics and Global Political Economy in the Master's program at Nepal Open University. He was the executive director of the Nepal South Asia Center (2009-14), a Kathmandu-based South Asian development think-tank. Bhurtel can be reached at [email protected].
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