Editor’s note: in this, our last commentary of the year, we look at the top economic stories we covered during the year. Please accept our best wishes for the holiday season, and for a prosperous 2019.

Confronting China
Over the past few decades, China has transformed itself from a minor economy with little global trade to the world’s largest exporter. China is now commonly referred to as the world’s factory, for good reason.

Besides low labor costs, this is largely due to the protection provided to Chinese industries in the form of lax environmental laws, generous domestic subsidies, state ownership and a “managed” currency. China’s appropriation of intellectual property and discrimination against foreign firms have also helped it gain competitive ground.

Unfortunately, these measures violate World Trade Organization (WTO) rules. They also have created large trade deficits among many of China’s trading partners. It is therefore no surprise that China has become the subject of heightened global anxiety. In September, American, European Union (EU) and Japanese trade ministers issued a joint statement criticizing China’s use of subsidies, claiming that China was turning “state owned enterprises into national champions and setting them loose in global markets.”