Economic Decoupling US – China Discussion at the AIM Summit, London 2023

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Economic Decoupling US – China Discussion at the AIM Summit, London 2023

by Joel Wong
April 16, 2023

The subject of Economic Decoupling between the US and China was a main feature at the April 16, 2023 AIM Summit, the Leading Alternative Investment Management Summit gathering, the aim of which is to connect international investors and managers to discuss and cultivate a dynamic platform for discourse on investment developments, global market conditions, and the latest trends.
The moderator of this session was Dani Burger (TV Anchor, Bloomberg) and featured Stephen Roach (Senior Fellow, Paul Tsai China Center of the Yale Law School, Former Chief Economist and Asia Chairman, Morgan Stanley) and Charles Myers (Chairman and Founder, Signum Global Advisors). Both featured speakers agreed that the Decoupling are occurring at three levels:

Economic Decoupling started some years ago but became full bloom under Trump’s administration. The assessment of tariffs on Chinese goods has somewhat backfired and have escessabated inflationary pressure on American citizenry. The increased tariffs have not decreased Chinese imports and the US trade imbalance has actually deteriorated. The increased import tariffs have not been relieved under the present Biden administration.
Technological Decoupling includes banning Huawei’s 5G technology from being used in the US and its ally countries. Also banned is Huawei cellphones access to Google’s popular Android software. Recently, the US has promoted a “chip” war cajoling her allies to ban the selling of advanced equipment, chips and transferring of technologies to China.
Geopolitical Decoupling includes fortifying US military bases in Japan, South Korea, Australia and building new bases in the Philippines. Increasingly, whether the US will militarily defend Taiwan’s ‘democracy’ is becoming an issue.

While Roach and Myers generally agreed that decoupling issues are of concern, their opinions on this subject diverge somewhat. Stephen Roach thinks the US efforts are not thought out carefully and that there is no cohesive strategy to contain China. Myers thinks geopolitics are in play and that the US will defend Taiwan should China attack it because Taiwan is a symbol of democracy that the US cannot afford to abandon.

Myers opines that the current administration has concluded that a Taiwan war will not go nuclear because China is more ‘rational’ than Putin who may be less hesitant to go nuclear in Ukraine. The two speakers ‘kinda’ agreed that many ‘unthinkable’ incidents have happened in geopolitics and that more than ever ‘thinking’ is the missing ingredient in the present US-China relationships.

This is my main take away from this video which is 43:32 minutes long.
Please also read the viewers’ comments as many are quite insightful!