Federal Trade Commission (FTC) Chairwoman Lina Khan has vowed to get tough on Big Tech and push American antitrust enforcement in a more interventionist direction since her appointment in 2021. That same year, China launched an aggressive regulatory barrage against its own tech firms, dubbed "common prosperity."

Disturbingly, Khan seems to have found inspiration in China’s crackdown, framing China’s common prosperity initiative as a merely vigorous and aggressive enforcement of antitrust laws. She’s even used it to justify her own policy preferences, noting in 2022 that although the outcome of China’s antitrust campaign was uncertain, it would “be interesting to see.”

However, Khan has since conveniently neglected the consequences those policies have had in China. As of 2023, common prosperity is now in the ash heap of failed ideas as Beijing struggles to regain business confidence. And Khan seems to have either forgotten or is unaware of the actual results of the Chinese initiative she references.

Khan recently claimed during an interview on CNBC’s Squawk Box that taking a more aggressive antitrust enforcement posture would help the U.S. stay ahead of China in technological innovation. However, this contradicts both the claims of U.S. firms that such policies would disadvantage them in comparison to their Chinese counterparts and the most conventional understanding of economics.

Regardless, Khan has challenged harmless or even beneficial mergers, such as Microsoft’s recent acquisition of Activision , aggressively, all the while being cheered on by Sen. Elizabeth Warren (D-MA). For decades, this transaction, and others like it, would have been considered innocuous, even beneficial. However, Khan’s FTC takes a more skeptical view, one that discards the economic analysis that has been the basis of competition enforcement in favor of structural presumptions that big is bad.

China’s common prosperity initiative worked much the same way. In early 2021, Xi Jinping announced the start of common prosperity , an initiative to reign in China’s big businesses and alleviate income inequality. Chinese regulators brought aggressive antitrust enforcement actions against large tech firms such as e-commerce giant Alibaba, the food delivery service Meituan, and the ride-hailing app DiDi. Penalties were steep, totaling billions of dollars, and charges were brought swiftly with little notice or even the customary limited due process of the Chinese legal system.

Beijing asserted that its ad hoc, aggressive use of anti-monopoly law was necessary to combat corporate power and also achieve its goal of building “ 10,000 little giants ," the idealistic notion of having numerous medium-sized firms rather than a few large players. Like Khan, Beijing believed that this vision was better for economic growth and income equality.

The actual result, however, was disastrous. Investors pulled their money out of China as the CCP signaled, perhaps irreversibly, that political risk would always be a substantial threat. Stock prices for major Chinese companies such as Alibaba plummeted and have still not returned to their pre-common prosperity highs. Youth unemployment , particularly for college-educated individuals, skyrocketed to more than 19% as Beijing’s top tech firms cut workforces and operations.

Not long after these disastrous results, all mention of common prosperity was purged from the discourse , despite having been a part of daily life and the political narrative. In an attempt to reverse the effects, the CCP made vigorous efforts to reassure the business community that China was friendly to commerce. Yet the international business community remains skeptical, and rich Chinese nationals are continuing to move their assets to neighboring countries such as Thailand and Singapore.

The U.S. should learn from China’s disastrous antitrust experiment rather than seek to replicate it. To be sure, technological innovation will be a key part of the economic competition between the U.S. and China. But Khan’s efforts to aggressively increase antitrust enforcement to compete with China ignore the realities of what built the U.S.’s competitive advantages in the first place.

Khan’s policies also ignore the results of the Chinese government's similar antitrust actions. China may be a unique political-economic system, but the economic lessons Beijing has learned surrounding the limits of antitrust law are universal.

Dr. Ryan Yonk is senior research faculty and Ethan Yang is an adjunct research fellow at the American Institute for Economic Research.