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US versus China: decoupling or new synthesis?


Highlights: China is the second largest economy in the world, with a GDP of 18 trillion dollars. It is the main trading partner of 130 countries, including the U.S. and the EU. China's economic growth is outpacing that of the rest of the world. China is the world's second-largest economy, after the United States. It has a growing middle class of 500 million people, and is a major economic power. The relationship between China and the West has been improving since the 1950s.

US versus China: decoupling or new synthesis?

The United States and China had, between 1950 and 1970, a very bad relationship. The Americans were very busy fighting the Cold War with the USSR and the Chinese, they were a very poor and distant nation, which played a secondary role for the Soviets in Korea and Vietnam. Between 1970 and the end of the twentieth century, the relationship was improving, reaching high levels of commercial, economic and technological cooperation.

From the West it was believed that, in this way, China was going to "assimilate" capitalism and its culture, as happened in Japan, Korea and Taiwan. But that didn't happen.

Between 1980 and 2020, China underwent a process of accelerated economic growth that led it to lift 800 million of its citizens out of poverty and build a powerful middle class of 500 million eager consumers. With its GDP of 18 trillion dollars, it is the second in the world, after the US, with 23 trillion. Japan, Germany, France or India, do not exceed 4 trillion.

It is the second military power and is the main trading partner of 130 countries in the world... starting with the US ($650 billion of bilateral trade), the EU ($000 billion) or Latin America ($900 billion).

Today, China also has a technological and financial development equal to or superior to that of the United States. But all this served to make the prevailing system in China an increasingly "Chinese" regime with aspirations for hegemony that do not coincide with the Western vision of the world.

From the Trump administration, followed and deepened by that of Biden, the conclusion, both Republicans and Democrats, is that "China must be stopped" and, to achieve this, the "decoupling" of the Chinese economy must occur, cutting as many ties of cooperation or complementation as possible.

But, to do this, it is already too late. The existing relationship plot is very advanced and there is no way to interrupt it. To do so would be contrary to the interests of the largest American and European banks and companies.

Therefore, the only possible solution is to bet on the path of cooperation and coexistence between very different political and cultural systems, building global competition rules that include the protection of the environment and avoid the aggravation of military conflicts.

The regions that have both sides as main partners - the EU, Mercosur or ASEAN - must function as a bellows to reduce tensions and not act as multipliers of differences.

The capabilities of the "free world," as the creator of intelligentsia and technology, must put us in a position to metabolize China's phenomenal momentum in this century and ensure that two civilizations that founded the Roman and Chinese Empires 2,200 years ago can avoid a clash whose impact would result in the universal holocaust.

Diego Guelar was ambassador to the US, EU, Brazil and China.

Source: clarin

All news articles on 2023-05-28

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