WASHINGTON, DC – APRIL 30: U.S. President Donald Trump (L) listens as Nvidia CEO Jensen Huang speaks in the Cross Hall of the White House during an event on “Investing in America” on April 30, 2025 in Washington, DC. Trump was joined by CEOs to highlight companies and their investments in the United States during the event. (Photo by Andrew Harnik/Getty Images)
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No nation intent on crushing its rivals economically and militarily would ever aggressively export to those same rivals. Which is basic economics. Importing frees recipients of same to specialize their own work on the way to soaring productivity.
It’s worth keeping in mind when contemplating Palantir chief technology officer Shyam Sankar’s recent Wall Street Journal critique of Nvidia CEO Jensen Huang. Sankar writes that Huang and other “business elites” persist in allegedly denying the sinister motives behind the abundant flow of Chinese production to the United States.
As Sankar sees it, the “Communist Party believes China and the U.S. are locked in a ‘great struggle’ for mastery. In this worldview, it isn’t enough for China to rise – the U.S. must fall.” Sankar’s rhetoric is so grave, and perhaps spooky, but for one problem: imports never weaken their intended recipient for the same reason that the division of labor domestically never weakens those so wise as to divide up work.
The above is basic Adam Smith, or for that matter Henry Ford. Smith referenced a pin factory in the opening pages of The Wealth of Nations to reveal exponential leaps in productivity the more hands at work in the factory, only for Ford to create cars for “the great multitude” by dividing up production among growing numbers of people. Huang sees what Sankar doesn’t, that the economically stimulative genius of work divided doesn’t stop at country borders, which is one reason why Huang properly views economic interconnectedness with China as a national security imperative for the United States. In Huang’s words, “If we can grow economically, we will be strong militarily.”
Sankar believes “China is already waging war” against the U.S., “including withholding rare-earth minerals,” but short of a nation literally hoarding whatever market good it wants to keep from country rivals, there’s no accounting for the final destination of the good. Though the Arab members of OPEC embargoed the U.S. in 1973, Americans still consumed Arab oil as though it had bubbled up in West Texas exactly because the U.S. easily imported the oil from those the Arab nations sold it to. Applied to China, short of it ceasing sales of its rare earths altogether, they’ll easily reach the U.S. in similar fashion.
Sankar claims that China’s intent with exports is to make nations like the U.S. “dependent on China,” but if China’s endgame is to somehow grow its economy through exports to the U.S. that will allegedly “weaken” the U.S. (a notable contradiction in an op-ed pregnant with them), the obvious end result of just such a strategy is that China will eventually find itself crushed economically by the very strategies ascribed to it by Sankar. Lest he forget, China can only export insofar as other countries are importing, which is just a comment that if China’s aim is to weaken the U.S. economically with exports (an impossibility, by the way), then its strategy is one of self-immolation.
Sankar oddly claims that by spending “roughly 5% of gross domestic product on industrial subsidies,” Beijing is growing China’s economy with government spending meant to “drive competitors out of business.” There Sankar ignores that government spending and subsidies logically harm their intended recipients, all the while sapping the strength of those relieved of funds so that backward-looking governments can conduct industrial policy. In other words, if China’s aim is to grow its economy with government-directed subsidies, then it’s safe to conclude that it’s pursuing not the “conquest economics” Sankar suggests, but the economics of decline. Put another way, the central planning that China tragically embraced in total in the 20th century won’t succeed when tried just a little, or 5 percent, in the 21st.
Sankar laments that “American companies have invested vast sums over decades” to turn “China into a juggernaut.” His unwarranted lament unwittingly signals two things, but of them bullish: first, that China is no longer communist precisely because money flows to where it’s treated well, and communism vandalizes money.
Much more important is that exports are just another word for investment. Much as investment strengthens those matched with it through the acquisition of resources crucial to enhanced productivity, so do exports do the same for the receiving country precisely because they once again free the importing nation’s workers to specialize economically.
In short, the brilliant coupling of the U.S. and China economically is strengthening both. No doubt this redounds to the military of both nations, but of much greater importance this economic interconnectedness renders war of the shooting kind between China and the U.S. increasingly unlikely with each passing day.
Huang thankfully grasps the above truth, while his critics don’t. Quoting Sankar quoting Huang, the future “doesn’t have to be all us or them. It could be us and them.” Yes, it could. Us and them is the path to prosperity and peace. Contra Shyam Sankar, Jensen Huang is exactly right about China.