May 01, 2020
Global Supply Chains, Economic Decoupling, and U.S.-China Relations, Part 2: The View from the People’s Republic of China
Introduction: The World As Beijing Sees It
U.S. economic policy is not the only force at play threatening to disrupt the deep economic ties between the People’s Republic of China (PRC) and the United States (as discussed in part 1 of this article series). Chinese officials have also been driving a wedge. From the launch of the National and Medium- and Long-Term Program for Science and Technology Development (PRC State Council, 2005) to Made in China 2025 (PRC State Council, 2017), China has consistently pushed for self-sufficiency in specific sectors, limiting foreign exposure where possible . As the Trump Administration has adopted a more confrontational trade posture with China, introducing trade and investment restrictions, Beijing’s plans have only been accelerated.
However, the additional forces driving apart the world’s two largest economies are secular economic trends. The PRC faces a shrinking, shifting workforce that threatens to undercut its global manufacturing status, and a looming middle-income trap that encourages Beijing to compete with Washington in high-value-add sectors. Looking forward, the economic shock from the COVID-19 pandemic will likely make the United States and the PRC further averse to interdependence, if the pandemic has a lasting impact into the future.
Read the full article in The Jamestown Foundation's China Brief.
More from CNAS
-
Disorderly Conduct
The United States must develop a strong, pragmatic strategy for advancing its economic and security interests within the U.S.-China economic relationship, accounting for the f...
By Emily Kilcrease & Adam Tong
-
No Winners in This Game
Watch...
-
Outbound Investment Controls in a U.S. Economic Security Strategy
This testimony addresses the national security risks that can arise from certain U.S. investments in China and other countries of concern....
By Emily Kilcrease
-
Principles and Policy Options for Designing Better Investment Barriers
This testimony focuses on options for designing an effective program to address the national security risks that can arise from certain U.S. investments in countries of concer...
By Emily Kilcrease