Treasury Secretary Janet Yellen said Wednesday that she expects the US to decouple economically from China in certain areas to protect “national security” but that a complete technological decoupling is not likely.
Like other Biden officials, Yellen made it clear she views China as the top foreign adversary. “China is our most serious competitor and it poses challenges to our security and our democratic values,” she told the Senate Finance Committee.
Yellen said she was looking at a range of ways to counter China. “We’re looking at the full range of tools that we have to push back to redress practices that harm us [and our] national security and our broader economic interests,” she said.
While she favors some decoupling, Yellen said she “would worry somewhat about complete technological decoupling.” Part of her concern is that she believes the US’s allies would not want to cut off doing business with China completely.
“If we are too broad in our policies in terms of how we approach this, we can lose the benefits that come from having globally integrated technology systems where advances in one country benefit countries worldwide,” she said.
While the US is increasingly becoming more adversarial with China, the two countries’ economies are still entirely reliant on each other. The US has taken small steps to be less reliant on Chinese supply chains, but a complete decoupling from China, the US’s top trading partner, would take years of effort.
One example of US efforts to decouple is a massive $250 billion China bill that was passed in the Senate last week. The bill would allocate about $52 billion to subsidize domestic semiconductor manufacturing to make the US less reliant on Chinese chip-makers.
The Biden administration recently completed a 100-review of US supply chains. Based on the report, Biden is forming a trade “strike force” that would seek to bolster supply chains and counter what the US calls China’s “unfair trade practices.”
The Pentagon recently identified China as its top “pacing challenge,” meaning the US is preparing for war with China. An armed conflict at this point is not realistic due to the economic reliance the US has on China. While it may be a slow process, if the US takes serious steps to decouple from China as it further militarizes the Indo-Pacific, the risk of war will significantly increase.
The US is counting on it`s NATO allies to help which IMO will be just a token gesture , doing business with China is a no brainer unlike doing business with the US sanctions are like the sword of Damocles hanging over you if you don`t toe the line.
How did it used to go? something about China buying up our debt and keeping not only the US economy afloat but much of the worlds economy as well. And how we loved them when we needed them, but all the while we were figuring out how we could “contain them”. So what’s their crime? According to Trump, they are evil currency manipulator’s, I mean think of it they try to keep their economy going by adjusting the value of their cash”. Not like us, waging illegal and immoral wars, bombing and killing every day and printing trillions upon trillions to pay for it all. Where do these US war mongers come from? They call it higher education, really? If so I thank God for being a drop out.
More of the same. The US has been “decoupling” as much as it can, in preparation for conflict, part of its new Cold War.
New Cold War is the wrong thing to do, in so many ways it is hard to summarize here. Emphasis on military, and emphasis on preventing cooperation, are two key elements.
The US must protect itself. China does.
The US also must build itself, not just arm itself and use those arms.
The US also has things on which it needs cooperation, such as global warming, cybersecurity, space exploration and use, deep ocean exploration and use, and more. New Cold War blocks and refuses that needed cooperation, and the US is the loser.
Real diplomacy is needed, finding agreements while protecting interests. That is not New Cold War.