Effective countermeasures to US decoupling policy toward China
Effective countermeasures to US decoupling policy toward China

Effective countermeasures to US decoupling policy toward China

China USA Photo: Global Times

On Monday, Hong Kong’s benchmark Hang Seng Index fell 5 percent to its lowest closing level since March 2016, while the Hang Seng Technology Index fell 11 percent, the biggest one-day drop since the index went live in July 2020. In the US, the Nasdaq Golden Dragon China Index fell for the third time in a row and fell 12 percent. On Tuesday, Chinese stocks fell.

This fall in the stock market comes on the heels of a warning from US officials that China should not help Russia after the news broke in the Western media that Russia has asked China for military aid in Ukraine, a rumor China quickly denied. The US is spreading fake news to harm Chinese companies and cause capital flight, resulting in an overall fall in equities.

Wall Street traders did not hesitate to respond, “for fear that Beijing’s proximity to Putin could trigger a worldwide boycott or even sanctions against Chinese companies.”

This smells more or less of conspiracy theory, but it is exactly a continuation of the US decoupling policy towards China in recent years. Decoupling is good not only in the high-tech sector but also in the financial sector. As the United States believes that its own high-tech technology should not be transferred to China, Chinese high-tech companies will not be allowed to raise capital through Wall Street.

The ultimate goal of US and Western sanctions against Russia, apart from dividing it, is to weaken Russia’s economic power and push it out of the global economic and trade chains, making it a second-rate country incapable of participate in the United States. led globalization.

The “decoupling” of China has the same effect in both respects. But China is different from Russia. China is not only dependent on industrial raw materials and low-cost products to enter the global industrial chains. China is dependent on large-scale, multi-level, all-round production. This is China’s advantage.

China needs to strive for more access to advanced sectors to break the US blockade. However, China needs to further consolidate its position in the global industrial chain.

The reason why US trade policy towards China is difficult to implement and trade between the US and China is rising instead of falling is that Chinese manufacturing has been deeply entrenched in the US and global industrial and supply chains, and no other country can replace it. .

We have the ability and strength to further integrate into global industry and supply chains. This is the key to China in expanding its global influence and contributing to global trade. If Chinese companies withdraw to their home countries or withdraw from industrial or supply chains at this time due to U.S. repression and blockades, the withdrawal would exactly coincide with Washington’s strategic attacks.

Companies are the basis of China’s economic position in the global economy and the basis of its capital power to the world. The world’s financial systems are in the midst of deep adjustment, and China’s ability to drive and participate in these adjustments still depends on the extent to which its companies participate in global development.

Chinese companies should not stop becoming global. Instead, they should accelerate and expand their markets, the scope of cooperation and draw on the manufacturing sector in emerging economies around the world. This is especially important in neighboring economies, implemented through the One Belt and One Road initiative, and many different means.

In particular, companies with leading technology such as Huawei, while improving competitiveness, are breaking into the global market on all fronts to break through the pressure on the US market. For companies that have the strength to expand internationally, the country should provide more political support. At the same time, China’s capital strength should be the strong backing for the development of its companies. We should create the conditions for these companies to emerge in the global capital market.

The author is a senior editor at People’s Daily and currently a senior fellow at the Chongyang Institute for Financial Studies at Renmin University of China. [email protected] Follow him on Twitter @dinggangchina

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