Destructive Decoupling

Policymakers in both the United States and China seem to have fully accepted, and even embraced, the logic of economic decoupling. But what exactly will decoupling entail, and what will its consequences be?

Over the last year, the trajectory of Sino-American relations has become indisputable: the United States and China are headed toward a substantial, though not complete, decoupling. Far from resisting this outcome, both sides now seem to have accepted that this will play out as a largely non-cooperative game, to the point that they are embedding it in their policy frameworks.

On the American side, national-security concerns have led to the creation of a lengthy – and still growing – list of restrictions on technology exports to and investments in China, as well as on other channels whereby technology moves around the world. To enhance the strategy’s impact, the US is trying to make sure – including through the threat of sanctions – that other countries join its efforts.

 

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