"The historic response, if you like, is has always been to look to subsidize, to insulate the impact of the fluctuations of exchange rates and commodity prices by looking to subsidize ... things like bread, " Hanna told CNN.
Where once the West relied on China's lack of environmental enforcement to tamp down rare-earth prices and implicitly subsidize high-tech goods, in the future the nature of the subsidy will change so that China's cheap(er) labor will subsidize Western mid-tech goods.