How Silicon Valley chip pioneer MIPS landed in China

Ha. I was involved with MIPS in 2004 or so and worked with them on their China strategy. They were very worried about going to China and losing control of IP. My counterpoint was: MIPS was basically an also-ran to x86 & ARM and survival was the big question. The chances of survival without presence in China was basically zero so: MIPS should maintain their market in the US and fight for presence in China; if they got into China, then they could focus on the larger war and on defending IP in China...; if they didn't get into China, they were dead anyways.

The US argument for protectionism against China is based on the theory of competitive advantage, which posited that trade occurs when one nation is better at producing something than other nations. That old model has been revised in favour of a more nuanced understanding.

Paul Krugman was awarded the Nobel Prize for economics in 2008 for his work on the Home Market Effect, which established that nations of similar economic levels trade most with each other.

Rich countries with larger demand for high quality goods will tend to specialize in those goods and consequently will tend to trade more with other rich countries, which have similar demands in their domestic markets that can be satisfied by imports. Hence, trade occurs between similarly rich countries. The effect is similar to the way restaurants thrive in areas where there are more restaurants.