Introduction

Abstract

Since the 1980s China and the United States (US) became more interconnected in economic terms. However, the process of economic coupling between these two countries did not immediately result in greater interconnectedness between the financial markets of these countries. Only since the global financial crisis (GFC) of 2008–2009, the Chinese financial system has gradually changed from a traditional bank-based to a more market-oriented financial system. It triggered a massive expansion and opening of China's capital markets to the outside world, and these financial markets are gradually broadening and deepening more in line with those in the West. At the same time, China has become increasingly important for international financial markets, especially due to its weight in international trade, but also because certain cross-border capital flows are increasing. The Chinese financial market is accompanied by the digitalization of this market and an increasing application of financial technologies. As a result, both US and China have become the world’s largest financial centers based on financial technology. Currently, the fierce competition between both countries in the global economy is primarily fuelled by their technology sectors, including world-class research expertise, deep capital pools, data abundance, and highly competitive innovation ecosystems. The US–China trade dispute has gradually turned into a tech war that increasingly reflects the change in the technology landscape between the two countries. Strong economic competition between China and the US in recent years has ultimately led to an economic and partial technological decoupling. However, the Sino-US financial ties are different and are more characterized by financial couplingfinancial coupling even though this Sino-US financial interdependency has recently come under increasing pressure due to geopolitical tensions between the two countries.