28th Parliamentary Intelligence-Security Forum – Changing Security, Changing Policy Tools: Meeting the Challenge of Chinese Authoritarian Mercantilism

Mr. Carl Delfeld underlined that mercantilism, as opposed to the classical free trade, refers to a closed and government-controlled economy and society. It is a top-down economic strategy designed to increase national wealth and power. He explained that in implementing a mercantilist approach, governments identify specific sectors—such as automobiles, electronics, textiles, and commodities—to dominate, thereby acquiring economic and political strength. He highlighted several tools used to achieve this, including regulations, subsidies, and protectionist measures for domestic companies.

He further discussed why countries often tolerate mercantilist practices, citing factors such as complacency (the belief that it will eventually pass), a lack of power to resist, and sometimes a strategic interest in seeing mercantilist countries grow stronger because it indirectly benefits the United States, as seen in the cases of Japan and other allies. However, Mr. Delfeld pointed out that while China adopted a similar mercantilist strategy, its immense size, scale, speed, and focus allowed it to succeed where others have failed. He observed that U.S. corporations, in pursuit of their own interests, relocated manufacturing to China and accepted its restrictive policies and technology theft, prioritizing profit over patriotism.