In Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism (2007), Ha-Joon Chang argues that the economic histories of today’s advanced nations follow a recurring and often obscured pattern. Countries such as Germany and Japan began with industries widely stigmatized for low quality, then relied on protectionist policies, state support, and strategic imitation to nurture domestic firms. Over time, these industries upgraded technologically, achieved global reputations for quality, and—once firmly established—became vocal advocates of free trade. Chang contends that rich countries now “kick away the ladder” by denying developing nations access to the very tools that enabled their own ascent.
Modern China presents a striking contemporary parallel to this historical trajectory. Like “Made in Germany” or “Made in Japan” in earlier eras, “Made in China” initially signified cheapness and inferiority, yet through extensive state support, controlled openness, and rapid learning, Chinese industries have steadily moved up the value chain. As China’s manufacturing and technological capabilities gain global recognition, its experience closely mirrors the pattern Chang identifies—albeit on an unprecedented scale and at remarkable speed—underscoring the continued relevance of his critique of free-trade orthodoxy.
From Stigma to Supremacy: How Protection and Learning Precede Free Trade
In Bad Samaritans, Ha-Joon Chang dismantles the comforting myth that countries become rich by practicing free trade from the outset. Instead, he shows that many economies now regarded as paragons of quality and competitiveness once suffered from deeply stigmatized exports. Their eventual success followed a recurring historical pattern: initial inferiority, followed by protection and guided learning, gradual upgrading, international recognition for quality, and only then the embrace—and promotion—of free trade.
The story of “Made in Germany,” which Chang uses as a point of departure, is far from unique. In the mid-twentieth century, “Made in Japan” carried connotations of cheap, poorly made imitations. Japanese firms produced low-quality toys, electronics, and household goods, and lacked both technological sophistication and global credibility. Rather than opening its markets fully, Japan shielded its infant industries, restricted imports, controlled foreign investment, and forced firms to learn through licensing, copying, and incremental improvement. Over time, this sheltered learning process transformed Japanese cars, electronics, steel, and ships into global benchmarks of quality.
South Korea and Taiwan followed strikingly similar paths. Korean exports in the 1960s and 1970s—textiles, wigs, and simple manufactures—were regarded as inferior, while Korean firms were virtually unknown abroad. Yet the state intervened aggressively: allocating credit, protecting domestic markets, disciplining exporters, and coordinating investment in heavy and high-tech industries. Taiwan, too, relied on strategic protection, state planning, and technology transfer to move from low-end consumer goods and contract manufacturing to advanced electronics and semiconductors. In both cases, early weakness was not a permanent condition but a stage in a deliberate learning process.
Chang extends this argument beyond East Asia. The United States in the nineteenth century was widely seen as an inferior manufacturer compared to Britain, yet it was also one of the most protectionist major economies of its time. High tariffs and active industrial policy allowed American firms to catch up, scale, and eventually surpass their rivals. Switzerland offers another illustration: once known for cheap imitation watches, it became synonymous with precision only after decades of copying, experimentation, and gradual upgrading.
Across these cases, the role of the state was neither accidental nor marginal. In postwar Japan, institutions such as the Ministry of International Trade and Industry coordinated industrial priorities, controlled access to foreign technology, rationed credit, delayed exposure to full competition, and sometimes forced mergers or picked national champions. Similar forms of guidance and discipline appeared elsewhere. These arrangements were not free markets, but they were also not rigid central planning; they were systems designed to give firms time and pressure to learn.
The common lesson Chang draws is historical rather than ideological. Industrial leaders were not born competitive, nor did they achieve excellence by immediately submitting to global market forces. They first endured stigma and low quality, then relied on protection, imitation, and state support to build capabilities, gradually upgraded their products and processes, and only after securing dominance did they become champions of free trade. By insisting that today’s developing countries forgo these same tools, Chang argues, rich nations are not promoting development but “kicking away the ladder” that they themselves once climbed.
“Made in China” and the Recurring Logic of Industrial Stigma
For much of the 1990s and 2000s, the label “Made in China” functioned less as a neutral indicator of origin than as a shorthand for inferiority. It was widely associated with low prices rather than value, speed rather than durability, and imitation rather than innovation. In popular and policy discourse alike, the phrase became a stigma marker—signaling products assumed to be cheap, unreliable, unsafe, or disposable before they were even examined.
This perception was reinforced by highly visible controversies and selective examples: toys tainted with lead paint, counterfeit electronics, poorly regulated factories, and vast assembly lines producing goods designed elsewhere. China was framed primarily as a site of low-end manufacturing for foreign brands, not as a place where knowledge, design, or technological capability could meaningfully originate. The implication was not that China was passing through an early stage of industrial development, but that its limitations were structural and enduring.
Yet this narrative was neither new nor unique. Nearly identical language had once been applied to other late-industrializing economies. German steel and machinery were dismissed as crude in the late nineteenth century; Japanese radios and automobiles were derided as flimsy in the mid-twentieth; South Korean textiles, Taiwanese plastics, and other export goods were similarly branded as cheap and inferior. In each case, early manufacturing outputs were treated as evidence of permanent backwardness rather than as the predictable products of learning, scaling, and technological accumulation.
As scholars such as Ha-Joon Chang have argued, this misreading reflects a recurring error in Western economic judgment: mistaking a transitional phase for a fixed identity. The stigma attached to “Made in China” thus fits into a long historical pattern, where emerging industrial powers are judged not by their trajectory but by their starting point. What appears, in retrospect, as an obvious stage of development is, in the moment, recast as proof of intrinsic limitation—until history renders that judgment untenable.
China’s Development: Repeating the Once-Condemned Path of Today’s Advanced Economies
China’s economic rise has often been criticized as a violation of free-trade principles, portrayed as an aberration that undermines the global economic order. Yet this narrative obscures a crucial historical reality: China’s development strategy closely mirrors the very paths once taken by now-wealthy nations such as Germany, Japan, and South Korea. What is frequently described today as “illegal” or “unfair” behavior was, in earlier eras, widely accepted as legitimate nation-building.
In its formative stages, China relied on a familiar set of tools. These included high tariffs and non-tariff barriers, strict controls on foreign ownership, mandatory joint ventures accompanied by technology transfer, and large volumes of state-directed credit channeled through public banks. China also pursued explicit industrial policies through its Five-Year Plans, emphasized export discipline, and protected infant industries until they achieved sufficient scale and competitiveness. None of these measures were novel; they constituted a standard developmental playbook used repeatedly by successful late-industrializing economies.
What has changed is not the substance of these policies, but the language used to judge them. Practices once framed as pragmatic and necessary for development are now condemned as “market distortions,” “state capitalism,” or outright “cheating.” As economist Ha-Joon Chang has argued, rich countries have effectively “kicked away the ladder,” denying developing nations the same policy space they themselves once exploited. In this light, China’s trajectory appears less as a deviation from history and more as a continuation of it—one that has become controversial largely because it has succeeded on an unprecedented scale.
From Imitation to Global Leadership: China’s Industrial Quality Transformation
China’s industrial rise follows a familiar pattern in late-developing economies: firms were not born competitive; they became competitive through sustained learning, scale, and relentless upgrading. As with postwar Japan, early Chinese products were often dismissed as crude, unsafe, or derivative. Yet imitation was not the endpoint—it was the starting point. Over time, Chinese firms moved systematically from copying foreign designs to adapting them, then improving upon them, and finally innovating at the frontier.
This progression is especially visible in manufacturing and infrastructure. Chinese construction companies, once criticized for low standards, now dominate global markets for large-scale infrastructure, including ports, power systems, and transportation networks. China operates the world’s largest high-speed rail system, designed, built, and iterated primarily by domestic firms. What was once perceived as low-quality execution has evolved into an integrated capability combining engineering depth, cost control, and rapid deployment.
A similar transformation occurred in electronics and advanced technology. Early Chinese electronics firms largely served as low-end OEM assemblers for foreign brands. Over time, companies such as Huawei, DJI, Xiaomi, BYD, and CATL followed a trajectory once taken by firms like Sony or Samsung—learning through production, internalizing know-how, and ultimately pushing technological boundaries. Huawei’s rise from telecom equipment assembly to global leadership in 5G before facing political restrictions exemplifies this shift from dependency to leadership.
The electric vehicle and battery sectors underscore the culmination of this quality turn. Chinese EVs were widely mocked a decade ago as inferior or experimental. Today, they are globally competitive on cost, range, and reliability, supported by world-leading battery manufacturers. Rather than outcompeting them directly, many Western governments have responded with subsidies, tariffs, or outright bans—echoing earlier reactions to Japanese automobiles, which were once ridiculed, then constrained through “voluntary export restraints,” and later portrayed as unfair competition. In this sense, China’s experience is not anomalous but historically consistent: industrial leadership is rarely welcomed by incumbents, especially when it emerges from imitation into genuine technological command.
Shelter Before the Storm: The Recurring Path from Protection to Competition
China’s development trajectory closely follows the pattern identified by Ha-Joon Chang: a sequence in which protection precedes competition. Industrial ascent begins not with immediate exposure to global markets, but with the deliberate shielding of domestic firms. Within this protected space, firms are compelled to learn—through imitation, scale, and state-guided coordination—before being asked to compete on equal footing internationally.
As capabilities accumulate, the state gradually shifts policy toward upgrading and selective exposure to foreign competition. Only after firms achieve sufficient scale, quality, and technological depth are they pushed outward. This sequencing—protection first, competition later—has historically been the rule rather than the exception among late industrializers, allowing domestic industries to survive long enough to mature.
The final stage is almost always backlash. Germany and Japan were tolerated, even encouraged, when they were weak; once they became strong, they were accused of unfair practices. China now occupies this same position. The controversy surrounding its rise is not an anomaly, but a familiar response to successful catch-up—one that tends to emerge precisely when protection has done its work and competition finally begins to bite.
Kicking Away the Ladder: The Double Standard of Rich Nations
The development debate becomes most revealing when it moves from theory to practice. Ha-Joon Chang’s insight—that today’s rich nations seek to deny others the very tools they once used—captures a pattern that is unfolding not in hindsight, but in real time. The rhetoric of global economic governance increasingly exposes a sharp asymmetry between what advanced economies demand of latecomers and what they themselves historically practiced.
Contemporary prescriptions directed at countries such as China emphasize strict intellectual property protection, the prohibition of industrial subsidies, immediate market liberalization, financial neutrality, and the avoidance of favoritism toward domestic firms. These demands are presented as universal principles of sound economics and fair competition, allegedly essential for efficient and rules-based global markets.
Yet history tells a different story. Germany freely absorbed British industrial techniques; the United States systematically appropriated textile and manufacturing knowledge from Britain; Japan built its industrial base through extensive reverse engineering; South Korea protected and financed its chaebol while disregarding foreign patents; and Switzerland refined its reputation for quality through imitation before innovation. These countries did not develop by following the rules they now insist others obey. They climbed using ladders of protection, imitation, and state guidance.
What has changed is not the principle, but the distribution of power. When similar strategies are employed today—especially at the scale and speed demonstrated by China—they are reframed as distortions, threats, or violations of the international order. The ladder that once enabled ascent is pulled up once newcomers approach the top.
This pattern reveals a core hypocrisy in the global economic system. Appeals to fairness and rules mask a deeper impulse toward incumbent protection. The issue, therefore, is not whether development strategies are legitimate in principle, but who is permitted to use them—and who is told, after the fact, that such paths are no longer allowed.
Free Trade as an Ideology of Post-Industrial Success
A recurring pattern in economic history is that free trade is most vigorously promoted by countries only after they have secured industrial dominance. Ha-Joon Chang’s observation captures this uncomfortable reality: nations tend to abandon protectionism and preach liberalization once they no longer need shelter from foreign competition. Britain embraced free trade after establishing supremacy in manufacturing; the United States shifted toward liberalization once its industrial base became globally pre-eminent; and Japan followed a similar path after its firms achieved overwhelming competitiveness. Contemporary Europe, while championing “rules-based trade,” continues to subsidize agriculture and strategic industries, reflecting the same underlying logic.
This framework applies squarely to China. In many sectors, China remains in a catch-up phase rather than at the technological frontier, making state support and selective protection economically rational rather than ideologically deviant. Much of the Western anxiety surrounding China’s rise is therefore less about violations of abstract moral principles and more about intensifying competition from a formidable latecomer. The controversy is not fundamentally ethical; it is strategic. Free trade, in this light, appears less as a universal doctrine and more as an ideology adopted after success has already been secured.
From Stigma to Status: How “Made in China” is Redefining Global Perception
Historically, country-of-origin labels have carried strong associations, often evolving from stigma to prestige. “Made in Germany” came to signify engineering excellence, “Made in Japan” became synonymous with reliability and efficiency, “Made in Korea” with advanced electronics, and “Made in Taiwan” with precision manufacturing. These labels not only reflected the strengths of their industries but also shaped global consumer perception and market positioning.
Today, a similar transformation is underway with “Made in China.” Once a shorthand for low-cost, mass-produced goods, the label is increasingly associated with cutting-edge industries such as electric vehicles, batteries, drones, telecommunications, solar energy, and AI hardware. This shift signals a transition from low-cost manufacturing to technological sophistication, challenging incumbent leaders and reshaping global expectations. As the perception of Chinese products evolves, “Made in China” is steadily taking on the same aspirational resonance that “Made in Japan” achieved decades ago—turning a former stigma into a marker of quality, innovation, and reliability.
Key Takeaways
China is not an anomaly—it is the rule. What is unusual is not China’s rise, but the insistence that it must develop without the tools every successful industrial nation previously used. The rich world’s response reveals the truth Ha-Joon Chang emphasizes: free trade is not a neutral rulebook, but a power structure enforced when others start winning. Today, China occupies the same position Germany and Japan once held, criticized for being “unfair” precisely because it mastered the strategies that brought others success.
References
- Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. By Ha-Joon Chang, 2007
- Kicking Away the Ladder: An Unofficial History of Capitalism, Especially in Britain and the United States. By Ha-Joon Chang, 2002