The term “decoupling” has started to appear more and more often in reports dedicated to the current state of US-China relations after, on April 17, The Wall Street Journal published results of a survey of 25 large US companies operating in the PRC, conducted by the American Chamber of Commerce (AmCham) in China and AmCham in Shanghai.
The firms surveyed described their business plans in relation to China. Based on this information, the two organizations then concluded that the COVID-19 pandemic made the “US-China economic breakup” more likely in March 2020 in comparison to October 2019.
The author would like to note that the skepticism expressed by some survey participants about continuing to do business in China is quite justified. In fact, as early as March-April, negative consequences of the disruption in supply chains of components (which invariably exist in complex production and assembly processes) began to be felt. The aforementioned problems were an unavoidable outcome of tough quarantine measures (implemented not only in the PRC but also other countries) as part of the battle to stop the spread of the novel Coronavirus.
In such a climate, only 16% of the respondents (i.e. 4 companies out of 25 surveyed) “said they intended to shift some or all of their production outside China”. Still, the term “decoupling” used by AmCham gained popularity as the anti-China hysteria continued to reach new heights in the United States. Donald Trump himself, whose re-election campaign is not doing well at all, could not resist using the word in one of his Tweets.
In May 2020, anti-Chinese hawks in Washington ensured the US Senate “passed a bill that could block some Chinese companies from selling shares on American stock exchanges”. In effect, “it would require overseas firms to follow US standards for audits and other financial regulations”. According to an article published by CNBC in June, Donald Trump wanted “to delist Chinese companies from US exchanges”.
Aside from the aforementioned threats, the US President, along with China’s key nemesis, Secretary of State Mike Pompeo, has come up with practical measures to help “decouple” two of the world’s most powerful economies. Until recently, they successfully (but not without problems as is the norm) complemented each other.