U.S.-China Economic Links and Technological Decoupling

Abstract

The US has been waging an economic decoupling from China, in which national security concerns replace economic logic and loss-loss game replaces win-win gains from globalization. The decoupling is generating profound ramifications for the world as well as the US and China. The article explores the following questions: what drives the US government to implement the decoupling? what rationales for technology separation as the core of the decoupling? and what are possible outcomes of the decoupling in the short run and long run? It argues that (a) the decoupling was motivated mainly by national security and geopolitical concerns that China’s rapid rise has come to be seen as the largest threat to the US hegemony; (b) the decoupling concentrates on high-tech industries because technology is critical for the US to maintain its global hegemony, and (c) it is highly uncertain for the US to achieve its policy goals and a complete decoupling could divide the world into two economic blocs that centered on them.