US and China on path to ‘inevitable’ economic decoupling: report

White House needs to urgently work out the costs of separation, with the process already under way, researchers say

Disengagement must be targeted and based on facts, and not gratuitous, they say

Reading Time:2 minutes

99+

A fall in trade between China and the United States is one sign that decoupling is already under way, according to a US report. Photo: Bloomberg

Published: 6:00pm, 18 Feb 2021Updated: 11:29pm, 18 Feb 2021

The world’s biggest two economies are headed towards an inevitable divorce, but the US needs to manage it in a targeted way, according to an American study on economic ties with China.

“Decoupling is likely to continue in one form or another, even if it does evolve in a more measured, targeted way,” the US Chamber of Commerce’s China Centre and New York-based research firm Rhodium Group said in a joint report released on Wednesday.

“In both Washington and Beijing, political trust is at a nadir, and a return to the cooperative engagement policy that dominated the relationship since 1972 is difficult to imagine absent a sea change in both capitals,” it said.

The assessment comes as the administration of US President Joe Biden reviews tactics on China. Biden and his senior officials have labelled Beijing as a strategic rival, “the most serious competitor”, and “the chief pacing challenge”, suggesting that they will keep up the hardline position of the Trump era.

The report said the rivalry was set to increase and Washington needed to work out the best degree of economic engagement with Beijing.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x