China-US ‘de­cou­pling’ talk de­scribed as ‘dan­ger­ous’

China Daily (Hong Kong) - - FRONT PAGE - By LIA ZHU in San Francisco and JIA GUO in New York Con­tact the writ­ers at li­[email protected]­nadai­lyusa.com

Un­re­al­is­tic talk of the United States and China “de­cou­pling” poses a real dan­ger to bi­lat­eral re­la­tions, ac­cord­ing to for­mer Aus­tralian prime minister Kevin Rudd.

There’s too much loose talk about de­cou­pling around the US, which is a “very dan­ger­ous and im­pre­cise ad­di­tion” to lan­guage about the US-China re­la­tion­ship, said Rudd, pres­i­dent of the Asia So­ci­ety Pol­icy In­sti­tute, at a talk hosted by the Asia So­ci­ety North­ern Cal­i­for­nia on Thurs­day in Palo Alto, Cal­i­for­nia.

He said the word first ap­peared in the con­text of the US-China re­la­tion­ship in May 2018. Steve Ban­non, US Pres­i­dent Don­ald Trump’s for­mer chief strate­gist, took it up as a way to de­scribe “what should hap­pen be­tween China and the US” in Au­gust.

“Those seek­ing to un­ravel this re­la­tion­ship, be care­ful what you wish for in terms of known con­se­quences and un­in­tended con­se­quences,” Rudd said. “If you keep chant­ing the mantra that these two coun­tries and economies are de­cou­pling, there’s a grave dan­ger that you start to cre­ate self-ful­fill­ing prophe­cies.”

Rudd said the facts do not add up to sup­port the propo­si­tion that the two economies are in the pro­cess of com­pre­hen­sive de­cou­pling.

The past four decades, start­ing in 1979, when the two coun­tries es­tab­lished full diplo­matic re­la­tions, have been a “re­mark­able pe­riod of en­gage­ment” be­tween two coun­tries, economies and so­ci­eties, he said.

He said the Trump ad­min­is­tra­tion’s re­stric­tions on the easy flow of peo­ple be­tween the US and China would be “the most dis­as­trous de­cou­pling of all”.

“My sug­ges­tion is it would be very bad for any coun­try like the United States to start clos­ing (the) door,” Rudd said. “As soon as we start im­pos­ing oner­ous visa re­stric­tions on students, re­searchers and think tankers, I think it’s the thin edge of the wedge.”

The two coun­tries have made the strate­gic de­ci­sion not to “jump into the ravine”, re­al­iz­ing that “a full blown trade war with tar­iffs on every­thing was so mu­tu­ally de­struc­tive that it should not be sus­tained”, he said.

US con­sumers and busi­nesses paid a to­tal of $7.1 bil­lion in higher costs from im­port taxes in Septem­ber, up 9 per­cent from Au­gust and more than 59 per­cent from a year ear­lier, ac­cord­ing to an anal­y­sis by the US Com­merce and Agri­cul­ture de­part­ments.

The in­for­ma­tion was re­leased on Wed­nes­day by Tar­iffs Hurt the Heart­land, an anti-tar­iff bi­par­ti­san cam­paign. Roughly $4.1 bil­lion of the tax costs were con­nected to tar­iffs that Trump im­posed on Chi­nese goods since 2018.

The in­crease was largely caused by the 15 per­cent im­port taxes ap­plied to about $112 bil­lion of Chi­nese goods that went into ef­fect on Sept 1. The hike means 87 per­cent of tex­tiles and cloth­ing from China and 52 per­cent of shoes are sub­ject to im­port taxes.

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