Why “decoupling with China” is doomed – Xinhua
* In its latest attempt to decouple from China, the United States has enacted a new chip law, forcing companies to roll back their production lines.
*Some analysts say decoupling from China is not the right way to address the challenges facing the United States, while others say decoupling from China is not only perilous, but impossible .
*Despite the US rhetoric of decoupling from China, more and more business insiders have realized the importance of the Chinese economy in global industrial and supply chains.
BEIJING, Aug. 27 (Xinhua) — In response to a question from U.S. media about decoupling with China, Doug Barry, spokesperson for the U.S.-China Business Council, replied, “Why would we want to decouple from this sauce? buttered ? “
Given the scale of the Chinese market, its economic resilience, and its central position in the global economy and supply chains, it’s no surprise that multinationals and industry veterans share the point sight of Barry.
Consider Tesla’s success in China. The American automaker’s Shanghai-based Gigafactory hit a new milestone with its one millionth vehicle produced in mid-August, after delivering a record 77,938 vehicles to China in June, up 177% year-on-year.
There’s no reason for the world leader in electric vehicles to abandon the booming market that accounted for more than half of global electric vehicle sales last year.
Tesla is one of more than a million international companies operating in China, most of which are tightening ties with their Chinese partners rather than closing shop.
DECOUPLING DOES NOT TAKE PLACE
Western media continue to spread the lies that multinationals are leaving China in droves amid geopolitical tensions and other uncertainties.
A customer shops at a supermarket in Millbrae, California, the United States, Aug. 10, 2022. (Photo by Li Jianguo/Xinhua)
Reality tells us otherwise.
“If your definition of decoupling is foreign companies leaving China outright, or at least significantly reducing their footprint and diversifying their investments away from China, then that is definitely not happening,” Jacob Gunter, principal analyst at the Mercator Institute for China Studies in Berlin, was quoted by Bloomberg as saying.
“What we typically see in most industries is kind of the opposite,” Gunter said.
For example, in early July, Audi began building its first electric vehicle factory in China, and Airbus SE won one of its largest orders worth more than $37 billion from four Chinese airlines. .
Meanwhile, in Guangzhou, the host city of the China Import and Export Fair, multinationals such as LG, ZEISS, AstraZeneca, Panasonic and Mars Wrigley have launched new projects or added production lines.
A report released by the American Chamber of Commerce in South China in March said more than 70% of US companies assessed have plans to reinvest in China for 2022.
It is no coincidence that in the first half of 2022 compared to last year, European Union investment in China also increased by 15%, according to data from Rhodium Group.
Besides investment, experts say China, as one of the top three trading partners of more than 120 countries and regions around the world, including the US, EU and Japan, occupies an irreplaceable position in global trade and supply chains.
“China has developed a comprehensive and efficient manufacturing ecosystem over the years, which cannot be replicated by any other country,” Koh King Kee, president of the Center for New Inclusive Asia, a Malaysian think tank, told Xinhua recently. non-governmental.
“No country in the world can completely replace China,” and that means decoupling from China is “completely empty talk,” said Yuki Izumikawa, head of the Japan Association for the Promotion of International Trade.
People visit the 130th session of the China Import and Export Fair, or Canton Fair, in Guangzhou, south China’s Guangdong Province, Oct. 15, 2021. (Xinhua/Liu Dawei)
A FAILED POLITICAL AGENDA
After former US President Donald Trump’s administration embroiled the world’s two largest economies in trade clashes and threatened economic decoupling with China, his successor Joe Biden has, to some extent, continued trade policies uncompromising.
However, decoupling from China is a political slogan not based on reality, Kent Lassman, president of the Washington-based Competitive Enterprise Institute, and Iain Murray, senior fellow at the organization, wrote in an article published in The Hill.
As part of Washington’s pursuit of geoeconomic and geopolitical dominance, decoupling will backfire, with ripple effects around the world.
In 2018-19, significant tariff hikes imposed by Washington led consumers and businesses to pay $114.2 billion more for imported goods. If Trump-era policies continue, US GDP will be nearly $60 billion lower and employment will decline by 176,800, the Washington International Trade Association said in a blog post.
Following Biden’s signing of the CHIPS and Science Act a few days ago, Stephen Ndegwa, senior lecturer at Nairobi-based US-Africa International University, warned that the move was “like shoot in the foot”. In a hyperconnected globe, “what happens in one part will reverberate across the world,” he said.
A recent study by the Munich-based economic research institute Ifo found that for Germany, the engine of the EU economy, decoupling from China will cost the country six times as much as Brexit.
Decoupling would amount to “economic suicide” for Germany, said Helga Zepp-LaRouche, founder and president of the German think tank Schiller Institute, noting that it is clear that “the majority of the world’s population does not want to go with such decoupling”. “
CHINA INDISPENSABLE IN GLOBALIZATION
As a strong advocate of globalization and multilateralism, China continues to open its doors to the world and share development opportunities with global partners. Its increasingly deep integration into the global economy makes “decoupling with China” impossible.
Aerial photo taken on Aug. 20, 2022 shows the Tesla Gigafactory in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone in east China’s Shanghai. (Xinhua/Jin Liwang)
In late July, the Political Bureau of the Communist Party of China Central Committee convened a meeting that analyzed the current economic situation and organized economic work for the second half of the year, stressing the importance of boosting economic development through reform and opening up, urging efforts to boost exports, expand imports, promote the introduction of technology and foreign investment, and push forward high-quality cooperation in the Belt and Road.
LaRouche attributes China’s steady economic growth and success in eliminating absolute poverty in part to its open economic policies and China’s proposed Belt and Road Initiative, adding that issues such as Africa’s development and the reconstruction of the Middle East are out of the question without China’s cooperation.
Noting that China’s contribution to global economic growth has been stable at around 30 percent over the past decade, Koh said China has long promoted open, inclusive and win-win cooperation through international platforms. -regional forms of cooperation such as the ASEAN-China Free Trade Area and the Regional Comprehensive Economic Center. Partnership.
Koh said globalization, which drives economic growth around the world, is irreversible.
(Video reporters: Li Cheng, Zhao Xiaona, Guo Shuang, Guo Jun; Video editors: Zhu Cong, Wang Houyuan)■