ZAP // Space Perspective; Pixabay
“China, not the US, was the first to initiate economic decoupling.” And “in reality, there is no way the US and China can go back to what they were 10 years ago.”
An analyst said this Friday that the United States and China “cannot return” to the relationship they had a decade ago and said that the separation of the two economies began long before the trade war.
During a lecture at the University of Macau, Kevin Zhang, a professor at Illinois State University in the central United States, was asked whether there is an “ideal decoupling” between the two superpowers.
“In fact, there is no way of the US and China returning to what they were 10 years ago”, said Zhang, explaining that the reason was mutual dissatisfaction. “Both sides are not satisfied” with the bilateral relationship, he explained.
In a trade war, “there is no dominance in escalation, neither the US nor China can maintain asymmetric weapons in the long term, because all weapons are double-edged swords,” said the academic.
The analyst explained that the United States has the most comprehensive asymmetric toolkitincluding the dominance of the dollar, technological chokepoints, the power of economic sanctions and the size of the consumer market.
“China, in turn, has dominance in the supply chain in areas such as rare earths, electric vehicles and batteriesas well as a large consumer market, although its financial tools and alliances are weaker”, he added.
In his analysis, Zhang argues that both countries are already suffering with the trade conflict, but they have also been preparing for long-term independence for years.
“Even before the trade war, around 2016 and 2017, China was already working to make its high-tech sector independent of the US,” explained Zhang.
According to the analyst, the motivation was concern about the strong dependence on North American systems, from finance to the Internet.
“Think about the Internet, information technologies, they have to depend on the US,” notes Zhang, “because the US built the platform.”
He cited Chinese technology as an example: “because the company used the Android system, it became vulnerable to pressure from the US. In just a few years, Huawei fell from first place in its market to out of the top ten.”
Zhang said that, recognizing this vulnerability, China began creating an alternative system, the WPS system, over the past 15 to 20 years.
“China, not the US, was the first to initiate economic decoupling,” he argued, “other countries realized this, but they can’t do anything”, “only China realized this, then built another system.”
Looking to the future, Zhang believes that other small and medium-sized economies, including Vietnam, Japan, France and Germany, will learn from this example.
“They will be careful not to be 90 percent dependent on the US or China in any single area,” he added.
