US Must “Pursue Targeted Decoupling” From China’s Economy, Says Former US Ambassador

Despite the latest Sino-American phase one deal to ease tensions over trade, one former top US official is now calling for a decoupling between both economies, reported the South China Morning Post (SCMP). 

Former US ambassador to India Ashley Tellis explains in a new book titled Strategic Asia 2020: US-China Competition for Global Influence — that the world’s two largest economies have entered a new period of sustained competition. 

Tellis said Washington had developed a view that “China is today and will be for the foreseeable future the principal challenger to the US.”

“The US quest for a partnership with China was fated to fail once China’s growth in economic capabilities was gradually matched by its rising military power,” he said.

Tellis said Washington must resume its ability to support the liberal international order established by the US more than a half-century ago, and “provide the global public goods that bestow legitimacy upon its primacy and strengthen its power-projection capabilities to protect its allies and friends.”

He said this approach would require more strategic cooperation with allies such as Australia, Japan, and South Korea.

“The US should use coordinated action with allies to confront China’s trade malpractices … should pursue targeted decoupling of the US and Chinese economies, mainly in order to protect its defense capabilities rather than seeking a comprehensive rupture.”

The latest phase one deal between both countries is a temporary trade truce — likely to be broken as a strategic rivalry encompasses trade, technology, investment, currency, and geopolitical concerns will continue to strain relations in the early 2020s.

A much greater decoupling could be dead ahead and likely to intensify over time, as it’s already occurring in the technology sector. 

Tellis said President Trump labeling China as a strategic competitor was one of “the most important changes in US-China relations.” 

The decoupling has already started as Washington races to safeguard the country’s cutting-edge technologies, including 5G, automation, artificial intelligence, autonomous vehicle, hypersonics, and robotics, from getting into the hands of Chinese firms.

A perfect example of this is blacklisting Huawei and other Chinese technology firms from buying US semiconductor components.  

Liu Weidong, a US affairs specialist from the Chinese Academy of Social Sciences, told SCMP that increased protectionism among Washington lawmakers suggests the decoupling trend between both countries is far from over.

The broader shift at play is that decoupling will result in de-globalization, economic and financial fragmentation, and disruption of complex supply chains.