PQC: For years I’ve tried to warn these newly developed countries that export oriented economy is very dangerous, especially under the current world system of nation-states- statist system.
Simply because to be successfully export oriented, at the first phase, the domestic wage rate has to be suppressed in order to gain edge in export with low cost of production, and the local national currency has to be depreciated to achieve “competitive export price”. This in turn sacrifices and weakens the domestic consumption power by the low wage/income couples with expensive import products. In such a export mode of production the national economy becomes totally dependent on foreign consumption. But under the current world of nation-state statist system, where there are plenty of demagogues, nationalist clowns, and racial, religious dickheads, who can lie their nations into international conflicts anytime, in which trade wars are always on the top list of government actions! When trade war take place, those export oriented industries will collapse for their products could not be sold to domestic consumers either because the domestic consumers do not need these products and/or cannot afford them due to their low wage/income!
My economic advocacy is always to build a strong domestic market with diversity of consumer products, of which food production is in priority as national security. This is a fundamental step to build a strong domestic consumption power first before heading to export with quality products rather than just with cheap price. With such domestic market and production, when international conflicts take place with trade wars, the nation economy is still stable thanks to its self-sufficiency.
Twenty years ago, I criticized China for not trying to build its domestic market and domestic consumption power. Fortunately, China, though a little bit late, started to do so ten years ago. With strong domestic market based on domestic products, strong domestic consumption power (wage/income) a nation can withstand every assault in any kind of trade war. Look at oil rich Venezuela one can learn many good lessons.