It's simple really. While America is open to and accepts competitive Chinese goods and services (comparative advantage = labor intensive), China is closed to and rejects competitive American goods and services (comparative advantage = technology intensive). For example, many Chinese firms export manufacturing goods to America, but not many American firms export communication services to China. That's not because American communication services can't scale to China. It's because the Chinese government is unfairly protectionist.
Here is a real world example. America accepts Foxconn whereas China rejects Facebook. While the Chinese government allows Apple to outsource its manufacturing jobs and sell its products in the Chinese market, it does not allow Facebook to do anything in China. Why? Because, to the Chinese government, Apple is beneficial in some ways while Facebook is beneficial in no way. Apple employs and trains Chinese workers. Facebook, on the other hand, doesn't do that.
There are 1.3 billion people in China. It requires elementary intellect to figure out that Facebook, Twitter, and Google have an enormous incentive to get in touch with that population. And they do everything possible to cater to their linguistic and other accessibility needs, but they are just not allowed to enter their market. Instead, the American companies are censured from the Chinese market. And in absence of Facebook, Twitter, and Google, there arise the Chinese copies of them: Renren, Weibo, and Baidu. The American companies, in effect, lose 1.3 billion customers in this rigged game. Not only that, they also lose their time-sensitive momentum and their intellectual properties.
The studies in the field of International Economics reveal that, in the long run, protectionist policies indeed benefit the growth of domestic infant industries. So, from the Chinese's perspective, their protectionism makes sense. But it does not make sense in the perspective of the world. The world loses so much while the Chinese gains. The Chinese government is a definitional hypocrite if it argues for free trade in one area and defends its protectionism in another area. The world, too, deserves some wag of the finger for arguing for free trade while not being its defender. In America's perspective, in order to save America from its 13 trillion dollar debt, the American government must shoulder against foreign governments for brutally fair trade agreements and property rights laws. And then heavily subsidize student education and worker training. Only after that, America will profit from specializing in comparatively advantageous industries.






















