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The China Shock Reverberates in US Politics and Economics

In December 1978, the Chinese leader Deng Xiaoping introduced economic reforms that dramatically altered China’s economy by strengthening trade and cultural ties with the West.

Beginning in the 1990s, these reforms set China on a trajectory to become what it is today: a nation with a dynamic and substantially market-driven economy that is also the world’s second-largest.

U.S. residents have enjoyed lower-priced goods exported from China since then, but many communities that produced goods that competed with Chinese manufacturing exports suffered job losses and economic downturns.

This negative effect on U.S. manufacturing jobs from Chinese exports is often called the “China Shock.” A recent study has found that even though this shock leveled off around 2010, its harmful aftereffects continued for many years beyond, particularly in certain industries such as furniture, games and toys, and children’s toy bicycles or cars.

I am an economics professor who has conducted research on China, and understanding when these trade effects ended allows me and other researchers to examine what long-term demographic aftershocks are occurring in U.S. communities and how best to deal with them. These policy prescriptions can be a