‘Industrial Policy’ Is Back: The West Dusts Off Old Idea to Counter China
An approach long criticized as inefficient is being adopted by the U.S. to fund sectors such as semiconductors
The U.S. and its allies have long pressed China to stop helping favored industries with subsidies, government preferences and other interventions.
Now they are beginning to copy it. Last month, the U.S. Senate voted for direct industry subsidies with little precedent: $52 billion for new semiconductor fabrication plants, called “fabs.”
Other regions have done the same. The European Union has committed to nearly doubling its share of global semiconductor manufacturing capacity, to 20%. South Korea approved up to $65 billion in support for semiconductors, and Japan promised to match other countries’ semiconductor aid while planning to turn Japan into an Asian data center hub.