Wholesale industrial reform often leaves blue-collar workers as its biggest victims. Just look at the empty factories and houses across the rust belt US states of Michigan, Illinois, and Ohio. Their decline is a consequence of cross-border trade deals that gave countries that could build better and cheaper cars access to the world’s largest economy.
China’s government is facing similar problems with its own increasingly redundant heavy industries. Many state-owned enterprises in the iron and steel, coal, cement, and shipbuilding sectors are loss-making and debt-ridden, wallowing in overcapacity after years of government-encouraged, super-charged investment.
Theoretically, Beijing should cut its poorly performing industries back via bankruptcies and...
