Discussions about a possible China-U.S. decoupling have been ongoing for over a year, with scholars from many countries airing various opinions. Even though the U.S. hasn’t formally defined its policy, related remarks by President Donald Trump and his team, as well as their actions over the past two years, show that their decoupling has both long-term and near-term considerations.
Ultimately, they want to cut off exchanges in all aspects between the two countries and downgrade bilateral interactions to the level of the U.S.-Soviet Union relationship during the Cold War, as Trump said the U.S. reserves “complete decoupling from China” as a policy option. Currently, the U.S. strategic orientation is to make every effort possible to limit, restrain and reduce cooperation with China and suppress China by all means.
A full decoupling between China and the U.S. is impossible. Since they established diplomatic ties four decades ago, there have been close and complex links between the two societies, which can’t be cut off with a single executive order by any government. The two economies are inseparable due to their extensive interdependence.
China boasts tremendous development potential and is expected to continue contributing a third of global economic growth over the next decade. With a population of 1.4 billion, its huge consumption potential is appealing to U.S. businesses.
More importantly, it is up to the market to decide whether the world’s two largest economies will decouple. An annual report by the U.S. Chamber of Commerce in Shanghai showed that U.S. businesses still see the Chinese market as a great opportunity. Despite trade and political tensions between the two countries, 92 percent of these firms have no plans to leave China, with more than two thirds saying they will maintain their current staff size. Only 4.3 percent said they would reshore their businesses in the U.S., mostly small companies.
Through the past decades of globalization, China has become an important part of the world economy. In recent years in particular, it has worked hard to develop balanced trade, with imports from and exports to ASEAN and EU countries both growing rapidly. Therefore, the U.S. clamor about decoupling will disrupt global industrial and supply chains, and has stirred profound anxiety in the international community. Singaporean Prime Minister Lee Hsien Loong’s Foreign Affairs article titled Endangered Asian Century and remarks by German Chancellor Angela Merkel and other EU officials indicate that other countries will not follow suit if the U.S. seeks to decouple from China.
For many U.S. allies and partners, trade with China is also essential to their economic growth.