The Decoupling Prophecy
China’s current role in the global economy might not be exactly what the United States envisioned when it supported the country’s accession to the World Trade Organization 20 years ago. But, in its own way, China is fulfilling the promise of that step, and it will most likely continue to do so, as long as the US lets it.
BEIJING – In 2018, Steve Bannon, then-US President Donald Trump’s chief strategist, argued that the United States needed to “decouple” from China. Since then, the term has become a fixture in discussions of Sino-American relations – to the point that some, such as former Australian Prime Minister Kevin Rudd, have warned that it could become a self-fulfilling prophecy. How salient is that risk today?
Some decoupling is undeniably underway. In recent years, the two countries have been locked in a tariff war. Moreover, the US has implemented sanctions against the Chinese tech giants ZTE and Huawei, authorized the delisting of Chinese companies from US stock exchanges unless they meet US auditing standards, and added a number of Chinese companies to its “entity list,” thereby subjecting them to additional trade restrictions.
This trend extends beyond trade and technology. For example, the number of Chinese students enrolled in American universities has plummeted. And the US has announced plans for a diplomatic boycott of the 2022 Winter Olympics in Beijing, prompting condemnation from China.