Industrial subsidies in countries like China translate to a net transfer of wealth from Chinese taxpayers to taxpayers in countries buying the subsidised service.
From a standpoint of global economic utility, subsidies shouldn't be encouraged however, because they lead to sub-optimal allocation of resources. It seems to me that a good way to get rid of subsidies is to make the case to the taxpayers footing the bill. If prompted, it seems unlikely that the Chinese populace would want to pay for westerners getting artificially cheap goods and services.
I am not sure that the subsidies really exist - labor simply is cheaper in some countries. Perhaps the best way to react is to accept the free gifts and transform them into innovation? That would be tax the own population that benefits from the cheap imports (subsidized or not), and invest the collected money into diversification and research? It seems unlikely to me that the industries subject to offshoring will ever fully recover. Or, if the industries seem likely to recover, maybe they should receive the tax money? After all, aren't the subsidies an attempt to squeeze competition out of the market, to come back with higher prices once the monopoly is established? So the tax money should maybe be spent on helping the industries survive.
For example lots of money could be spend on fancy software projects, that have no pressure to make money. Then, when India and other countries can not keep the prices low any longer, there will still be software companies in the own country. They can then turn back to producing serious stuff. (Just thinking for fun here). On the other hand, maybe the no-worries exploration phase yields some interesting results that bring in money later on.
Also, where to draw the line? Is it realistic to watch the whole world for "fair labor prices"? It seems more realistic to try to make one's own country "fair", you can't solve everybody else's problems, too.
Industrial subsidies in countries like China translate to a net transfer of wealth from Chinese taxpayers to taxpayers in countries buying the subsidised service.
From a standpoint of global economic utility, subsidies shouldn't be encouraged however, because they lead to sub-optimal allocation of resources. It seems to me that a good way to get rid of subsidies is to make the case to the taxpayers footing the bill. If prompted, it seems unlikely that the Chinese populace would want to pay for westerners getting artificially cheap goods and services.
(Just using China as an example here)