US-China decoupling to be accelerated by tightening of technology export controls, experts say
- Under the leadership of US President Donald Trump, Washington this week broadened restrictions on technology exports to China to keep products away from the military
- Experts expect severe supply chain disruptions and accelerated decoupling as the coronavirus row also inflames the relationship between the two superpowers
The Trump administration’s move to tighten export controls on technological goods to China this week will help accelerate the decoupling of the world’s two largest economies, experts have said.
The move is designed to keep key technology products away from the Chinese military, broadening existing controls and accelerating a process which has been under way for a number of years.
Chinese firms will accelerate efforts to “de-Americanise” their supply lines, while foreign firms may be forced to do the same if they wish to continue to work with China and “avoid the long arm of the US law”, since the measures give the US Department of Commerce more control over the resale of American goods, such as semiconductors, internationally.
These developments are exactly what the Chinese leadership has been cautioning against over the past few years
“These developments are exactly what the Chinese leadership has been cautioning against over the past few years, and risk adding evidence to the argument that US businesses are ‘unreliable’,” said Nick Marro, global trade lead at the Economist Intelligence Unit. “That term carries a lot of weight, and has previously been used in China to justify switching from imported foreign components to domestic alternatives.”