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U.S. and China Bilateral Relation
Context
- Recently, the United States has stated that it is switching from decoupling to de-risking in its approach to China.
Key highlights:
- The Trump-era focus of the U.S. to decouple from China is being phased out by a new concept.
- The U.S. has expressed that it is shifting its policy on China from decoupling to de-risking.
- The EU has already declared that its approach to China will be based on de-risking.
What is ‘de-risking’?
- United States administration stated that “decoupling” has been changed to “de-risking”.
- De-risking: According to the U.S. National Security Advisor, “de-risking fundamentally means having resilient, effective supply chains and ensuring we cannot be subjected to the coercion of any other country”.
- Objective: De-risking aims to limit such an effect only in areas where it undercuts the national security and industrial competence of the U.S.
- Decoupling: It stands for an eventual reversal of the four-decade old project to enmesh the two economies.
When the U.S. and China diplomatic ties established?
- After the establishment of diplomatic ties between the S. and China in 1979, both the countries embarked on a path of increasing economic interdependence.
- China gained immensely from this relationship, as it helped the country drastically widen and deepen its diplomatic and economic engagement with the rest of the world.
- As China’s economic and military power grew, its ambition to challenge the primacy of the U.S. in the international system became increasingly apparent.
- China’s rise not only came at the expense of America’s global clout, but also the latter’s domestic industry, which got “hollowed out” in its four-decade old economic embrace with China.
Why de-risking?
- In order to understand the rationale behind the U.S.’s shift from decoupling to de-risking because:
- Geopolitical significance
- Disruption of global economy
- Tensions on Taiwan Strait
- Acrimonious Spy balloon
- Russia-Ukraine Conflict
- Trans-Atlantic Consensus
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