Decoupling from China: U.S. may lose opportunities

Many companies are reinvesting their profits in China as they see the Asian nation as a strong market

BOAO, China (Xinhua) — Decoupling from China will cost the United States opportunities for development and leave it disjointed from the rest of the world, experts and scholars have said.

Speaking here at a panel discussion organized by China Institute, Nicholas Lardy, senior researcher at the Peterson Institute for International Economics, noted that there were few signs of major economies decoupling from China, as data shows that foreign direct investment (FDI) to China continues to grow strongly.

“Thousands and thousands of new foreign firms are being established every month,” said Lardy, adding that many companies are reinvesting their profits in China as they see the Asian nation as a strong market.

In the January-August period, FDI expanded 6.9 percent year on year to 604 billion yuan (about $85.36 billion). FDI inflow grew 3.2 percent year on year to $89.26 billio, data from the Ministry of Commerce showed.

These gains were hard-earned given the global FDI flows had declined for three consecutive years.

In 2018, global FDI went down 13 percent, and developed countries saw a record low FDI inflow since 2004, according to the World Investment Report 2019 published by the United Nations Conference on Trade and Development.

Noting that the United States has never been a big investor in China, Lardy pointed out that most of China’s foreign investments come from other places.

“If there is decoupling, it’s going to be decoupling of the United States from the rest of the world, because other countries are not decoupling from China,” Lardy said.