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Thursday, 13 February 2020

Coupling-decoupling: China (7)

There have been various articles claiming a decoupling between China and USA. Some articles dispute that decoupling. Late 2019, the former head of the Chinese Ministry of Commerce claimed that such a decoupling is "unthinkable" (SCMP). Remarkably, the Chinese Belt and Silk Road initiative is rarely seen as an example of coupling.

From a timing perspective, western decoupling may well be the result of this Chinese coupling. Also see my blogs on cause and effect. The former Chinese One Belt One Road (OBOR) initiative was already announced in 2013 (Wiki). The 2019 decoupling phrase has been used since the US-China trade war, which started in 2018.

It has been suggested that western factory relocations from China to other parts of Asia, are due to decoupling. In my view, this process was already ongoing due to ever-increasing Chinese labour cost. If anything, the pace of factory relocations has been accelerated due to the 2018-2019 US-China trade war and the subsequent 2020 Chinese coronavirus outbreak.

The American trade war against China can - most likely - not be separated from the following (alleged) Chinese hacks on American data: 2014: breaches of the Marriott hotel chain and Anthem health insurance, the 2015 hack of the Office of Personnel Management, and the 2017 Equifax hack. Economic decoupling might be Trump's payback, next to US fear over Chinese coupling.

Ironically, Trump's 2020 re-election might well be favoured (and hacked?) by the Russians, and might well be opposed (and hacked?) by the Chinese. The chaos of the 2020 Iowa Democratic caucuses may dwarf the 2020 US presidential election.

China used to be a "closed" country, similar to Japan. There are also other parallels between China and Japan. Isolationism appears to be an Asian habit (pdf). Hence, China is likely to pursue isolationism again, once its domestic nationalistic interests have been served.

The current Chinese leader has opted for an unlikely hybrid of foreign globalism and domestic nationalism, which is the source of US irritation. In American eyes, Chinese foreign globalism only serves its domestic nationalistic interests. There is no level playing field.

Japan's earlier hybrid version of foreign globalism and domestic nationalism did not end well. The period 1991-2000, as well as 2001-2010, are known as its Lost Decades.

The longer the 2020 Chinese coronavirus outbreak will last, the more likely the current Chinese leader will be replaced and that isolationism will return (eg, GPF-2019: The pressure on China, GPF-2020: The Geopolitics of the Novel Coronavirus). After having finished my draft blog, I received a similar conclusion by George FriedmanChina, Ultra-Competence and Coronavirus.

Working with Fire and Steel (1983) by China Crisis

Note: all markings (bolditalicunderlining) by LO unless stated otherwise.

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