China poses a potential trade shock for region

Washington and Seattle were insulated from the trade shock that hit the Midwest when China became a big exporter. Indeed, China became the largest destination for the state’s exports. The end of that honeymoon might be in sight.

This past week, China’s COMAC C919 airliner made its first test flight.

Up until now, Boeing has been China’s leading supplier of commercial airliners. The C919, which would compete with the 737, may eventually change that.

Last year, Boeing estimated China would become the world’s first trillion-dollar airplane market, with demand for 6,810 passenger jets over the next 20 years. That would be around one-sixth of total worldwide demand, forecast at $5.9 trillion.

Setting aside Boeing’s current slowdown and fears that the company, despite enormous tax breaks, may continue moving jobs out of the Puget Sound region, are we headed for a “China Shock”?

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MIT economist David Autor and his co-authors coined that term in an influential 2016 paper that examined the rise of China after its entry into the World Trade Organization and its effects on American manufacturing.

While the phenomenon lifted huge numbers of Chinese from poverty, showing “trade’s transformative economic power,” it also upended conventional economic thinking on the losers.

Gone was the idea that trade generally produced winners all around, with slight and short-lived shudders along the way. China provided the laboratory to show how this could be wrong.

Specifically, the enormous size, relative skill and cheaper labor of China hit specific industries and states very hard, making adjustments impossible — and creating plenty of disaffected working people. The damage would also prove long-lasting.

From 1979 to 1999, national factory employment in the U.S. fell by 2 million. But after China entered the WTO in 2001, another 3.5 million jobs were quickly gone by…

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