So-called 'decoupling' of the US with China 'disastrous' to all
The so-called "decoupling" of the United States with China will not only bring disaster to the two countries but to the rest of the world, according to speakers at an international conference in Singapore, who said the two countries should forge common causes for global development.
The US is seen to have "attacked China in areas such as trade, science and technology and people to people exchanges," but both countries need to understand that their development complement and reinforce each other, said Zeng Peiyan, chairman of the China Centre for International Economic Exchanges on Wednesday.
The center is hosting a two-day symposium jointly with the Lee Kuan Yew School of Public Policy of the National University of Singapore and Brookings Institution of the US. Attending it are guests from a dozen countries and regions.
Zeng said decoupling will benefit neither oneself nor others from the macro-economic perspective. It is evident that decoupling will extremely damage the interests of businesses and consumers. According to Peterson Institute for International Economics, a tariff hike of 25 percent on all Chinese exports to the US will lead to additional expenses of around US$2,000 for every American household annually.
In trade, decoupling will lead to manmade breakdown of the global value chain, he said.
As globalization is developing into depth, trade and investment are intertwined with massive cross-border flow of factors of production and the closely linked and inseparable global supply chain, industrial chain and value chain.
China and the US both enjoy important positions in the three global chains. If one forcefully gets out of the system, that will hurt the other as well as itself. For instance, the US threatens to cut off the supply of chips to Huawei but hurts its own companies as well.
He noted the idea of pushing for decoupling China and the US and attempting to build an independent and exclusive industrial system has overlooked the complexity of the linkage of the three global chains and will have to pay huge costs.
Moreover, from the perspective of scientific advancement, decoupling does not comply with the trend and features of the era of digital economy, according to the former vice premier.
Development and innovation of science and technology in the era of digital economy is a process of the succession and integration of systems, which cannot be completed on one's own strength. Even if independence could be realized at the technology end, it could not be achieved in a real sense in application. Therefore, development and innovation of new technology emphasize more than ever cooperation and sharing.
Besides, from the perspective of economic governance, decoupling will damage the global supply of public goods, Zeng said.
Currently, mankind is facing many common problems and challenges. Without a global supply system of public goods, every country would act in its own way and the consequences would be inconceivable.
"China and the US need to work hand in hand to provide the world more public goods rather than exit or even damage the existing system," he urged.
The former vice premier insisted that both countries need to understand that their development can complement and reinforce each other. He cited the 13th round of trade negotiations, noting that these discussions have made substantive progress in various areas.
Zeng said the two countries had a fruitful relationship in the last four decades and that their economic cooperation has also promoted growth in the Asia-Pacific region. Likewise, the onset of the trade friction in 2018 has eased growth not only in the US and China but the rest of the world. He cited the latest forecast of the International Monetary Fund which puts global economic growth rate this year at 3 percent – the lowest since 2008.
"To oppose decoupling and step up cooperation is the only option that serves the interests of China and the US. It is also the common aspiration of the whole world," Zeng told the guests.
Singapore's Emeritus Senior Minister Goh Chok Tong discussed about a "growing global economic uncertainty" on the back of changing dynamics between two of the world's biggest economies.
"An all-out conflict between the US and China would be disastrous not only for Asia but for the world," he said. Goh said that the best way to ease conflict is "to forge a common cause for the two superpowers to build a better world".
Goh is also urging other Asian countries to offer a 'voice of moderation'- a platform where parties can embody the shared values of strategic rationality, peace and stability, growth and prosperity and an interdependent, open, inclusive, rules-based, multilateral order.
Former Thai Deputy Prime Minister and Foreign Minister Surakiart Sathirathai said Southeast Asian countries can help in amplifying this "voice of moderation". He said the regional bloc, the Association of Southeast Asian Nations (ASEAN), has demonstrated the capacity of Asian countries to collaborate and to lead multilateralism.
He cited ASEAN's role in the creation of the Regional Comprehensive Economic Partnership, a proposed free-trade agreement.
ASEAN led the formation of the RCEP in 2012 and was supported by six other countries: China, India, Japan, South Korea, Australia and New Zealand.
Surakiart said once negotiations are concluded, it will be the largest multilateral trade deal in history, accounting for about one-third of the global economy and half of the world market.
He also cited the Belt and Road Initiative, which he said is not just a China-led initiative. Surakiart said it is multilateral in nature, given that infrastructure projects under its fold involve intra-regional cooperation.
"Asian countries are taking the lead in demonstrating the Confucius adage 'if we collaborate, we win. If we fight, we lose'," he said.
Zhang Xiaoqiang, executive vice chairman and CEO of CCIEE stressed that protectionism and unilateralism are against the principles of globalization and can weaken the world economy.
"Mutual cooperation is the only way forward," he said, noting that this should be based on equality and mutual respect.
Source: China Daily