Is it in the US’ interest to decouple from China financially? | Teen Ink

Is it in the US’ interest to decouple from China financially?

November 27, 2023
By quintonguo BRONZE, Shanghai, Other
quintonguo BRONZE, Shanghai, Other
2 articles 0 photos 0 comments

"The greatest economic strength lies in a nation's ability to stand on its own two feet, independent of foreign aid or interference." - John F. Kennedy, 35th President of the United States of America

As we enter another year of the U.S China trade war, international tensions have been heightened as never before. We once again stumble on the topic of the United States completely decoupling from the People’s Republic of China. As the two greatest economies in the world have developed a massive amount of dependence on each other, there are concerns in the fields of national security, misuse of intellectual property, human rights violations, unethical business practices, and more. This paper will attempt to persuade readers to support a financially independent U.S.A. and detach financial reliance from the Middle Kingdom, It will emphasise the need to protect American economic independence, further develop innovation, and promote self reliance.

The first and perhaps paramount factor for decoupling economically with China has to do with the national security of the United States. In some instances, the intricate web of economic connections between the US and China has inadvertently increased the risk of cyber threats and espionage. The intertwining of supply chains and joint ventures creates opportunities for malicious actors to exploit vulnerabilities and obtain unauthorised access to critical systems and sensitive data. This can lead to events like cyber attacks, Chinese allies such as North Korea have shown examples of such attacks, with 273 cyberattacks between 2009 and 2023. With decoupling, the United States would be able to reevaluate its engagement with China in sectors deemed crucial to national security, thereby reducing its vulnerability to cyberattacks and intrusions. This strategic reconfiguration could aid in protecting proprietary technologies, intellectual property, and classified data from external threats.

Moreover, the reliance on China for certain vital resources, such as rare earth minerals used in sophisticated technologies, has the potential to be weaponized during times of conflict. Decoupling could incentivize the diversification of these resources' sources, thereby reducing the likelihood of China using its control over these resources as leverage during geopolitical tensions. A diversified supply chain would provide the United States with greater flexibility and resiliency in sustaining vital industries and capabilities during disruptions. Diversified supply chains offer a solution by spreading production and sourcing across multiple locations.

Decoupling could also prohibit the transfer of sensitive technologies with both civilian and military applications. Certain technologies are susceptible to diversion for military use due to their dual-use nature., this can include technology like Unmanned Aerial Vehicles or drones, which are often used for civilian photography but can be adapted into weaponry, advanced materials such as aerospace steel can be used by a company like Boeing for new airplanes or made into a government fighter jet.

 By reducing its economic dependence on China, the United States could reduce the likelihood of unauthorised technology transfers that may inadvertently boost China's military capabilities, thereby protecting its technological advantage and maintaining a more stable position on the international stage.

In the contemporary global economy, where innovation is the bedrock of competitive advantage, protecting intellectual property rights assumes crucial importance. The necessity of protecting intellectual property rights emerges as a strong argument in support of proposals to decouple the US economy from China. The contrasting paths taken by two big giants, Huawei and Apple, serve as an apt example of this requirement in the technological sector. Huawei has been accused of intellectual property theft and unauthorised usage of technologies, whereas Apple has continually made investments in R&D to produce a range of cutting-edge goods. The divergent paths taken by these businesses highlight the crucial part that strong intellectual property laws play in building an environment that is favourable to innovation and maintaining fair competition.

Another instructive illustration of the value of protecting intellectual property outside of the technology sphere is the world of sportswear. Take the examples of Li-Ning and Nike, two well-known manufacturers of sporting wear. Nike, a US-based firm, has earned its reputation on the strength of cutting-edge technology and inventive designs, frequently patenting these innovations. In contrast, Li-Ning, a Chinese business, has come under fire for allegedly copying Nike's designs and merchandise. These situations not only highlight the necessity for strict intellectual property rights, but also show how inequalities in enforcement can affect the incentives for fair competition and innovation.

Strong intellectual property protections also promote international cooperation and fair technological transfers. Companies are more inclined to form alliances that foster knowledge sharing and innovation when they have confidence that their intellectual property will be protected. Conversely, worries about intellectual property theft can prevent businesses from forming partnerships or exchanging confidential information with organisations in nations with inadequate enforcement.

A pillar of the argument for promoting the decoupling of the US economy from China is addressing unfair trade practices. Allegations of unfair trade practices, such as currency manipulation, industrial subsidies, and intellectual property theft, have frequently tarnished the close economic relations between these two global giants. Market dynamics are distorted, fair competition is hampered, and the foundations of free and open commerce are compromised by these practices.

China's suspected manipulation of its currency, the yuan, to obtain a competitive edge in global trade is one famous example. China can increase the appeal of its exports to international consumers by artificially weakening its currency, effectively giving its goods a price advantage over those of its trading partners. As it prevents other nations' industries from competing on an even playing field, this tactic has prompted accusations of unfair competition.

Concerns have also been expressed about the industrial subsidies given by the Chinese government to indigenous firms. These subsidies, which are frequently designed to support vital industries, can skew the competitive playing field by enabling Chinese businesses to produce items at lower prices than their competitors outside. Such actions disrupt international markets, making it challenging for companies operating in other nations to compete without receiving comparable amounts of government assistance.

Additionally, concerns about pervasive intellectual property theft and coerced technology transfers by Chinese organizations have clouded the US-China commercial relationship. American businesses have accused their Chinese competitors of stealing their proprietary technologies and innovations, which has reduced the competitiveness of American firms. These actions impair the incentives for innovation and the expansion of high-tech industries in addition to undermining the integrity of intellectual property rights.

In this situation, decoupling offers a tactical response to these unfair trade practices. The United States can more forcefully defend its stance on matters like currency manipulation, industrial subsidies, and intellectual property theft by lessening economic reliance. China adopting more equitable trade practices that adhere to international standards would enable a stronger US negotiating position.

To sum up, the elimination of unfair trade practices is a crucial factor in favor of the decoupling of the US economy from China. The United States can lessen the negative effects of currency manipulation, industrial subsidies, and intellectual property theft by claiming more independence. In addition to leveling the playing field for international commerce, this strategy emphasizes the significance of just competition, open market dynamics, and the protection of intellectual property rights in establishing a sustainable and just global economic environment.



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