Paul Krugman: "China's Crisis as an Opportunity for US Manufacturing?... Talking Without Knowing Anything"

Paul Krugman, Distinguished Professor at the City University of New York, is delivering the keynote speech on the theme "Economic Paradigm Shift: People-Centered Economy" at the 2018 National Economy International Conference held on the 28th at the Shilla Hotel in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Naju-seok] "If anyone thinks that problems in Chinese manufacturing will create opportunities for other countries like the United States, they know nothing about 21st-century economics."

Paul Krugman, an economics professor at Princeton University, criticized U.S. Secretary of Commerce Wilbur Ross in an op-ed for the New York Times (NYT) on the 30th (local time).

On the same day, Secretary Ross stated in an interview with Fox News regarding the novel coronavirus infection (Wuhan pneumonia) originating in China, "I believe it will help bring jobs back to North America in terms of the global supply chain."

Wilbur Ross, U.S. Secretary of Commerce
Photo by Yonhap News

Regarding this, Professor Krugman pointed out, "During the Severe Acute Respiratory Syndrome (SARS) outbreak, there were negative impacts not only on the Chinese economy but also on the global economy," adding, "It is unclear whether the novel coronavirus will have a greater impact than SARS, but given that the Chinese economy now holds a larger share of the global economy, its impact on the world economy is inevitably greater."

He also mentioned that in a situation where manufacturing processes are intertwined through value chains, any issues with imports?whether due to viruses or tariffs?can cause problems in manufacturing itself, such as increased production costs.

He cited a Federal Reserve (Fed) report to highlight that the tariff policies implemented by the Trump administration have not led to increased production or employment in U.S. manufacturing.

Professor Krugman stated, "If Chinese manufacturing is severely hit by the novel coronavirus, the U.S. economy would face a situation akin to being caught in an intense trade war with China," adding, "In such a case, even tariff revenues cannot be expected."

He criticized, "What Secretary Ross's foolish remarks imply is how unprepared the Trump administration is, even if a pandemic of the novel coronavirus occurs."

This content was produced with the assistance of AI translation services.