China Likely Will Agree to Trade Deal to Minimize Decoupling

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The US administration has stopped talking about soybean-purchase agreements and begun talk of decoupling.

Is it geopolitically prudent for a large part of the US industrial supply chain to be inside of China? Why are American companies allowed to transfer critical technologies to China in exchange for short-term market access?

A study titled ‘2015 Global Innovation 1000’ by Strategy& and PwC, looks at key trends of the 1000 global organizations that spend the most on R&D.

American firms are moving their R&D operations to China not just to take advantage of lower costs, but to be in close proximity to their supply chains. About 50 percent of foreign R&D centers in China are now run by American companies, helping China achieve first place in market share for manufacturing R&D.

American policy toward China is seeking to prevent American businesses from speeding the rise of an adversary. Tariffs are one piece of an emerging anti-China strategy. The Trump administration is rolling out new export controls to limit the transfer of sensitive technologies such as AI and quantum computing. They have blacklisted high-tech Chinese firms such as the telecom giant Huawei from doing business in the U.S.

China is working to reduce its dependence on foreign wide-body airplanes, semiconductors and oil and gas.

There will be decoupling on both sides. If the Trade War is resolved then it will be partial decoupling and diversification of supply chains rather than complete separation.

SOURCES- National Review, 2015 Global Innovation 1000’ by Strategy& and PwC
Written By Brian Wang, Nextbigfuture.com

85 thoughts on “China Likely Will Agree to Trade Deal to Minimize Decoupling”

  1. By militarizing the South China Sea with ownership by 9-line, and outright government coordinated theft of private intellectual property, it will be a full decoupling instead of diversification. Public opinion is against China in this country now (against the government, not Chinese people) and that has a huge and likely underestimated effect in a democracy that the Chinese government is likely missing.

  2. You aren’t comparing the correct points.
    The question is not whether 2019 startup engineers earn more than 2019 big company engineers.
    The question was if 2019 engineers earn more relative to 2019 upper management compared to how much 1950s engineers earned relative to 1950s upper management.

    And remembering that 1950s management earned a huge proportion of their income via indirect means such as expense accounts, travel, company houses, company cars, company entertainment etc. etc. to get around the nominal tax rates.

  5. American and their Five Eyes lackeys are ‘god-fearing’ morally defunct evil ‘Xtains’, destructive in nature, and beggar-thy-neighbour is in their DNA. They do not understand cooperation, nurture benefits, and win-win approach. Trade with them is hassle, headache and harmful. The earlier decoupling with them the better, not just China, it applies to everyone in the world.

  6. All those industries you listed are already losing to China’s lower labor costs and to a lesser extent, China’s own innovations. If we’re going to compete against China in those industries, we really will have to out-innovate them (how about an electric toothbrush which monitors mouth health for a range of diseases and notifies your doctor via secure internet connection? And we haven’t yet begun to get serious about recycling steel, although Nucor does some of that and is more prosperous than U.S. Steel, which largely doesn’t. https://www.nucor.com
    Nucor Corporation is the safest, highest quality, lowest cost, most productive and most profitable steel and steel products company in the world.).

  8. Be a little bit embarrassing if her name really was Daenerys Drake.

    You can’t own a name even less than you can own knowledge.

  9. Oh, I used to know the original Greek quote. It was Aristophanes I think?

    A brief google later:

    Have you ever seen a beautiful, transparent stone at the druggists’, with which you may kindle fire?

    Aristophanes 420 BC, THE CLOUDS

    Yes, lenses were in use for a couple of thousand years. It was the idea of mounting them in a frame that held them in front of the eyes so you could just function normally while still being able to see that was the next step.

  12. Australia has GM cotton and it has helped the economy and the environment. Eventually these benefits will mean early mass adopters of GM will have significant advantages over traditional agricultural nations.
    It’s akin to saying Germany won’t buy electricity from France because it might be contaminated with nuclear electricity.

  13. “Though China’s growth rate will decelerate toward 2030, its economic scale, which was equivalent to about 60% of the U.S. in 2016, will reach 80% by 2030. But like Japan in the mid-1990s, when it approached 70% of the U.S. economy, China will not get over the hump and actually surpass America. 
    China will remain the second-largest economy, well ahead of Japan.”  Japan Center for Economic Research show

  14. The thing is, it is shear folly for the United States (and the west) to do anything to strengthen China – because they are clearly hostile and preparing for war with us. The entire west needs to completely decouple economically from China; so we are not funding their war machine. The old way of thinking, that China would one day realize the value of behaving properly has been completely invalidated. Decoupling needs to happen quickly, and afterwards, China can come back to the table, one contract at a time, and prove it will honor it’s agreements.

  15. I got that from a course on the history of China during my undergraduate studies at Berkeley during the ’90s. From my recollection, the glasses (I think they were single lens, as in monocles) then found their way to Italy (Silk Road trade) and subsequently became a very popular item in Europe. But I see Wikipedia says otherwise, though it mentions lenses being used early on as magnification in ancient Greece. I dug up one of the books from that course and I couldn’t find references to that invention, but to others such as the abacus, water-driven mills, coal burning, paper, mines (earliest use of gunpowder as weaponry) and wheelbarrow.

  16. i want to decouple from China and the rest of the eastern hemisphere completely.. id prefer America focus on teh western hemisphere personally for a long term goal

  18. decoupling from usa only, no problem go china. if decoupling from the west and japan, then china has big problem. So whether trump can do a west vs asia decoupling.

  20. Pity I didn’t see this earlier. 

    It is an interesting post-post-modern vision. With tongue firmly in cheek, “Grand Balkanization”? 

    My current thinking is that come-time that the next “hard power” war breaks out the first thing “to go” will be the zigzag of undersea Internet cables. It’d work mighty fast to isolate North America from Europe, ASEAN, China, Africa and frankly an awful lot of Central, South America, Oceana and so forth. Likewise, they too would be isolated. 

    Not completely so, no. The geosynchronous satellites would still be synchronizing, so to say. 

    And there’s Musk’s StarLink. And others, less subject to being “taken down” quite so easily as undersea cables. 

    However, if America’s dalliance with the Mideast War Zone was any indication of how things will work out, then DoS physical attacks will become commonplace. Its quite a vulnerable network. 

    Grand Balkanization might really be the end-game. 

    Who knows.
    GoatGuy ✓

  21. +30

    Thank you for finally explaining the GMO issue to me while I tried for a decade to understand why the EU was against peptides from GMO crops – because no organism with a backbone incorporates the DNA of its meals – especially if the consumers have backbones and the consumed are plants. Makes sense. GMO banning is pretext for protectionism. Thank you. Glad the Italians preserve their wheat supply just like I’m glad for the Japanese who subsidize domestic rice.

  22. Because back in the 1950s it was famous how many American engineers got stock grants and yearly bonuses equal in value to the compensation of company vice presidents?
    Is that your story?

    Because we could argue that startup culture and IPOs with stock options mean that actually the innovators are more likely to get the big bucks today than in the past.

  25. Are you suggesting that the steel industry, or the toothbrush industry, should be innovating as fast as the manufacturer of high end, highly computerized, internet linked cars?

    If housing had advanced as fast as computers… it’s the lead it to a joke, not an actual industrial policy.

  27. Yes, big lobby groups have a lot of influence over politics.
    But with multiple big lobby groups pushing for multiple different positions on most political questions*, this means that any particular lobby group rarely gets everything their own way.

    *If every lobby group supported the same side of a political question, it wouldn’t remain a question for long.

  28. Derek said much what I was going to say.
    You claim Brian got it backwards, and then you claim the same thing he just said.

  29. Not a bad analogy.

    And like the Chinese nuclear industry, the Europeans were able to use the technology that was suppressed by cultural and political considerations back where it was originally developed.

    (Though I’m not sure I agree with the invention of eyeglasses in China. All I’ve read on the subject says 13th century Italy. And I personally think it could be the kickstarter for the renaissance. After all you’ve just, over a period of a decade or so for the idea to spread, doubled or tripled the lifetime productivity of everyone who does fine detailed work (artists, writers, artisans, scholars, even the most advanced blacksmiths))

  31. “eliminate imports if they don’t leave the lil’ islands in contravention to UN grievances” … kind of paraphrased, but…

    Well, I too thought this once. It however is not the right course.  

    To impugn Giant China would require hard power. Naval blockades, embargoes, challenges to her power at sea.  

    It would almost certainly precipitate punishment of the Taiwanese, Hong Kong, Singapore a test of American alliances in the South China seas. It would likely embolden N. Korea, precipitating a war.  

    The cost would be high, for the lost sovereignty the few islands represent. 

    However, the soft-power war is already underway. 
    Tariffs. 

    We cannot impose import quotas, since our loudly trumpeted “free trade” capitalist forbids it. But we CAN impost tariffs. And we are. 

    The “problem” when The Eagle goes tariff warring against the Dragon … there are a LOT of opportunists AKA “we thought they were allies, but they are trading under the table, dâhmn it!” countries that’ll undermine and profiteer the situation.

    Again, this requires exquisite use of soft socio-economic power.  

    Tariff any ally who openly breaks the accord. Put up with their wheelbarrows of pölïtical shîtstorm blather. Deal endlessly with rabid knee-jêrk left-socialist media, Hêll bent on undermining US resolve.

    In the end, it will be the only way.
    Unless China SHOOTS first.

    Just saying,
    GoatGuy ✓

  33. It’s just the racist assumption that only the Chinese are innovators, it seems that way since there are 1.3 billion of us… In reality we have the same amount per-capita of innovators as any nation. We work in foreign companies as innovators with our foreign coworkers, the trade war isn’t going to somehow make all of us Chinese go back to China since most of the issues the Americans bring up are true, in China we also know that the Government is just using this trade issue to drum up nationalistic fervor, of course you have some idiots that believe it but a majority of us don’t.

  34. The decoupling would lead to moving to other poorer nations such as ASEAN for the immediate future but the overall trend is for localized manufacture with 3d printing and other cheap in-country automated manufacturing. This is why Corporate America is mad about IP theft because they know their cash is going to be based upon selling IPs to localized manufacturing in the not so far future. Moving away from China would’ve happened anyways regardless of Trump’s Trade War, it’s just speeding up the inevitable trend towards localized automated manufacturing.

  35. Tesla isn’t going to bring cars from China to America, he also wants a Megafactory in Europe also. As for competition, that’s good when it is done with different ideas and not some knockoff of stolen tech! As for Musk he is unique in how he operates business so just because he does benevolent deeds doesn’t mean all companies give away secrets, that would stifle innovation when all companies are equal, they need to attempt to overtake a company with their competing products otherwise you’ll just get the same product.

  36. You should have realized by now, the interests of money is all that matters and must be protected over all other concerns.

  37. Dunno… I don’t quite think so. 

    There has been 4,000+ years of ‘social engineering’ in China which The West has not had. This definitely puts gunpowder in your closing argument. Yet, in the same system, being the outstanding peg nearly-always means the one that gets whacked by the Hammer of Conformity.  

    So… not so sure your prognosis will be borne out. 

    Just saying,
    GoatGuy ✓

  38. Luckily …

    china’s only fear is that it hasn’t completely reduced the united states to a dry husk by the time the decoupling takes place.. trump is just the first president to start the decoupling…

    Luckily, I think we got “Trump just in time” to prevent being sucked dry. 
    It rubs salt in the Démocrát / Left / Socialist “party”, but it is true.

    Just in time.
    GoatGuy ✓

  39. Contrary to your ‘tormentors’ replies, I think you are right. 

    The call by Trump to repatriate manufacturing domestically must be a socio-economic tsunami for China. The bloke-on-the-bike only sees employment, or not. Rising or falling wages. Rising prices. Prosperity and hardship.  

    Contrary to that, loftier governent planners have the “instrumentation” to see far, far out.  

    Like most crystal bâhlls though, the power may be high, but of view is misty.  
    Hints of the future, 
    the possible future, 
    the likely future, 
    and the unlikely divinations. 

    Without a doubt, China hears Trump’s loud trumpeting, his nationalistic calls for industrial repatriation, his imposition of tariffs, and his (sometimes genius) caprice as THE most substantial existential threat to China’s geopolitical sovereignty yet. They have, with proud-face-saving notwithstanding, cause to be “shaking in their boots”.  

    So… as I’ve commented elsewhere on this page, Europe is facing a Recession-without-central-bank-stimulus tools. Australia and the Queen’s Sphere … are facing a eating-nearer-the-end-of-the-trough economic downturn problem. India … wow. She can’t beat China, and also has no economic tools to bear.  

    Its not looking good. 
    Except for the US, especially the short term. 
    Medium … not so much so. 
    Long … just fine. 

    Baring a world war. 
    And we WANT to bar that.
    Almost at all costs. 

    Just saying,
    GoatGuy ✓

  40. PART 2

    China’s economy depends crucially on the World Economy. Her ‘business’ is almost exclusively exports. She has had a bit of a ‘free ride’ with the reduction in world crude-oil pricing from over $75/bbl to now less than $50. Yet, her demand for imported oil appears to be “secular” (i.e. not cyclic). Rising, with over 50% growth in 3 years. 

    I don’t have the graphs at hand, but it seems that China has been feeling the rising wind of a world-wide Recession for the last 18 months. Her trade with the world, US tariffs notwithstanding, has been failing to rise to the levels predicted by her glib economists. Demand for Chinese products are continuing to grow, but the growth itself is waning. 

    Moreoer, she has an “uncovered debt load” which is truly prodigious. The last time China had an economic downturn, it was revealed that well over 70% of the nation’s credit paper was at-risk, and over 40% had fallen into default. Apparently she’s beyond even that jaw-dropping accord, now.  

    The Trump Administration’s anti-import tariffs against China are definitely also taking a toll. While China doesn’t actually need to send her crâhp to the US (i.e. if the US were to go Cold Turkey and eschew China’s output entirely), the collapse in manufactring would spin to a full-bore banking crisis internally.

  41. PART 3

    Banks are ALWAYS built on houses-of-cards, regardless of the system they espouse. And when the “in” basket of receipts doesn’t exceed the “out” counter of cash withdrawels, well … bankRUPTcy is in order. 

    China is at very high risk. 
    There is no doubt about it.

    US — worldwide — is at almost uniquely low short term risk. 

    Mid term … 2 to 3 year window, not so. Long term, almost no risk. The dollar continues to be the only significant world reserve currency to have central bank policy yielding positive interest, constrained money growth and an economy which is arguably in a vital “internal reconfiguration” to be less dependent on the cheap East Asian suppliers and not-all-that-cheap European ones.  

    Just saying,
    GoatGuy ✓

  42. The point isn’t their willingness, the point is that China does not lack for potential talent – ergo their capacity for development and innovation is only limited by investment, and we know they are willing there.

  43. There is a MUCH larger problem looming.
    The World appears to be entering an almost global Recession. 

    I’ve been watching the markets for some time, and it isn’t possible to overstate that Europe has been and is continuing to ‘dig into’ the bottom of her economic stimulus pit. For instance, 10 year

    –0.61% = German bonds 
    –0.50% = Netherlands 
    –0.44% = Belgian bonds
    –0.35% = Austria bonds
    –0.25% = Swedish bonds
    –0.34% = French bonds 
    ⊕0.86% = Italian bonds 
    ⊕1.99% = Greek bonds

    Remember: HIGHER interest signals LOWER confidence.

    Germany, with NEGATIVE 0.6%!, has MAXIMUM market ‘safety’ for investment, but loses money for investors! Greece and Italy, the least safety. 

    Central banks have few economic stimulus tools to counteract a progressing Recession. These are…

    • BIRR – Bond Interest Rate Reductions.
    • QE – Quantitative Easing – Government buy-back of outstanding paper
    • NSBI – Non-sovereign bond issuance
    • UMP – Unfettered money printing and issuance.

    The US 10 Y is running ⊕1.50% … but is USD vs. Euros;
    ________________________________________

    THE point here is: with a strong European recession gathering power, another in the British sphere, another in East Asia, one already underway in China, India and The Stans … central bank economic stimulus power appears to be tapped. 

    And this is a problem.
    Just saying,
    GoatGuy ✓

  44. 16 times sounds like a hyperbolic job count from a typical politician – certainly the company that opened the factory wouldn’t know the numbers for such increased resources straightaway, or even for years after, they simply wouldn’t care to know as long as they had employees they could come from miles away for all they care.

    You are just dancing to their tune by believing such bullshit and spouting it to others.

    Besides which, the days of towns being created by any single factory are dead and gone – why bother to go to the trouble of building in a place with nothing when you have a place already bristling with infrastructure, infrastructure which takes years longer than any single factory to grow around it.

    Sure some new housing estates may be built, but entire towns?

    Nope.

    My father used to work at a nuclear processing site called Sellafield in the UK, this employs people from all over the county – up to tens of miles away from the site itself, and the satellite resources they set up after relocating divisions were done so in existing towns.

  45. yes, that is if you assume they all go back to china willingly and instantly.

    and if you ignore the shortage of high level graduates it’ll create.

  46. when your enemy escalates, you must in turn, otherwise you’d be at disadvantage.
    for there to be a free market, both sides have to not muck with trade between them. Something china has done from the start, we’ve never had free trade with china, we’ve had imbalanced trade from the start, and will always have so until their cost of living/standards reach parity with ours.

    The overall deficit with china has been eating away at the American economy for decades, economist were wrong to not factor in quality of goods, IP theft and local employment.

    manufacturing jobs are extremely important to the economy, trickle up/down economics exist, employees get paid, they buy groceries etc, which employs grocers etc, who in turn buy factory products etc. who in turn… …you get the point.

    That is why when you see a report for jobs created by a factory moving into X, the jobs created are always MANY times more than the actual employees of said factory, this can be as high as 16 times for silicon valley jobs in the states. there is a reason why factory towns exist, and dry up when the factory goes away.

    TLDR: trade deficits ship factory jobs overseas, factory jobs keep MANY times their worker count employed, factory wages employee countless people, when you ship factories overseas, you destroy vast parts of the economy, there’s a reason why factory towns become ghost towns when the factory closes, and why so many more exist today than before trade with china, and japan before that.

  47. what about spaceX? he doesn’t share info on that except for docking standards.

    also, his release of his information has ensured his charging stations are the standard for the world, that gives Tesla an enormous advantage, it’s not complete altruism.

  48. You didn’t know Hillary was the corporate candidate?

    I shouldn’t be surprised though, since you think the NRA is a major lobbying powerhouse.

  49. Wouldn’t be the first time. When Europe was in the Dark Ages (only for Europeans – Asia and Northern Africa had higher levels of development). The crusades were about stealing treasures under the guise of religiosity, hence Spain became the more advanced European nation first to exit the Dark Ages after having been under influence of the “Moors”; and Europe adopted printing, the compass, porcelain (which was a huge commodity), eyeglasses, which were all invented in China. And Britain got much of its wealth stealing from the Spanish ships (pirates) that brought back treasures from around the world.

  52. Let me say this with quite simply: GM going under would not have reduced American demand for cars. It would have transferred those sales to other manufacturers, who would in turn have hired more employees.

    As many as lost their jobs at GM? No, likely not.

    But the free market can’t function properly if political decisions can dictate that a company will be saved from bankruptcy and its creditors cheated to accomplish that. And that loses people jobs, too, though maybe less visibly.

  53. Not only that but a great many research papers I have seen have a Chinese name amongst the authors.

    If all that talent withdrew from the US and other worldwide companies, their native development would skyrocket.

  54. The problem is that the US economy is inherently capitalist and globalist by nature in todays world.

    In order to restrict US companies from acting in the best interests of their shareholders and bottomline, the government is actually acting more like China in this situation by artificially restricting their market maneuverability in favour of a more nationalised model – in which capital is no longer king but the state is.

    So much for republican values of small government….

  55. He is highly dependent on his engineers – he is not so much as he is made out to be.

    None of the innovations made by his companies are particularly mindblowing but rather natural evolutions of existing technology.

    The Boring company electric tunneling machines are a logical step forward – simply one that others had not invested in.

    His innovation is by in large his willingness to invest in forward solutions rather than yet another company making the same things in a slightly different way to increase the market as a cost competitor.

    To use Apple as a metaphor – he is closer to Jobs than Wozniak on the scale of things, a businessman first and foremost.

  56. “Also corporations don’t choose presidents and congressman”

    You must be new to this game.

    Lobby power is a many splendoured thing – it makes the average congressman piss their pants when the NRA calls, or pretty much any significant military contractor.

    Do you seriously think the tech giants have no skin in the lobby game?

    You can bet that they are not happy at the moment, and withholding campaign contributions is one extremely effective way of encouraging politicians to vote in your favour today – they barely even bother to hide it.

  57. Say that to the remaining GM workers in the US (173,000 as of Dec 2018) with a straight face after they are put out of a job and see how much of a face you have left.

    You are blithely talking about tens of thousands of American people losing their jobs – do you think they give a damn about GM’s creditors when they have a decent job?

  58. “Why are American companies allowed to transfer critical technologies to China in exchange for short-term market access?”

    I was under the impression they called it capitalism and free will.

    If the government restricts US companies too much they are doing exactly what they accuse China of doing with native companies.

  59. Much of that business won’t come back to the US, but will go elsewhere. And that’s fine.

    China, however, will not recover if there is full decoupling. You cannot steal your way to long-term prosperity. Long-term prosperity comes from developing a society that reliably innovates, and feels safe to do so, rather than wasting resources keeping your competitors from having corrupt policemen frame and disappear you because you look like too strong a competitor.

  60. General motors ought to have died years ago, instead of being saved by the government by cheating its creditors. So I won’t mourn the company’s passing.

  61. It’s rather amazing that “Don’t remain dependent on totalitarian states that are strategic enemies” is actually a CHANGE in policy. But it is. That’s how little interest our own political leadership had in the interests of our own country for a while there.

  63. If they do then it is a tactical move. I believe that Americans will eventually be disabused of the conceit that only they can innovate. They’re comforted by the belief that the Chinese can only steal and copy technology. This is a grave error. The American public and its government fail to realize that innovation rarely comes from the C-suite; rather, it usually comes from some nondescript engineer working deep wtihin the organization. This has been the case throughout history. However, in this modern era, these innovators, who likely possess an intelligence that is at least one standard deviation above anyone in the C-suite of their respective organizations, are humiliated by the pittance they receive in comparison with the egregious and largely undeserved compensation paid to their top executives.
    Moreover, such an engineer has no equity stake in the very product of his effort. Nor can he be assured that his innovation will earn him tenure. This is a presciption for low productivity where the most capable men and women are repelled by this decidedly unfair arrangement. They would respond by quietly withholding their innovative ideas.
    Contrast this with a Chinese engineer working in a state owned enterprise. He is motivated by his patriotic duty. He would perceive an unfair treatment of companies like Huawei at the hands of the U.S. government. And this would work to galvanize his resolve. Consequently, Chinese productivity would increase.

  64. You talk about science but anti China campaign is about politics – so both sides will use tricks to inflict damages on the other side and GMO is a good pretext. EU also uses GMO as a reason of blocking imports from US.

  65. Funny, you think they can just turn in the bonds. If they cash out early they need a outside buyer, calling in the debt to the US would result in a loss unless they let the bonds mature. You don’t get the interest on the bond until it matures. China’s US treasuries only represent 15% of issued US treasuries, which is a lot, but the rest are largely held privately by US entities. They could only do so much damage and they would be hurting themselves as well. Remember China’s currency is not worth jack squat for international trade. China has only so much US cash reserves and they have been forced to set stricter limits on how much US cash its citizens can access.

  66. “Manufacturing equally distributed” – it would be nonsense. Imagine yourself that instead of concentration of production and R&D like in computer processors everybody wants to produce his own processor and be next Intel or AMD. What a huge cost ? Complete nonsense. Imagine million companies want to produce processors and every company spends billions on R&D.

  67. You are blind. You’re unable to think logically. You assume that “US will gain from assets coming back” but China won’t “gain from assets coming back” (assets like 1 trillion USD in US government’s bonds.) It’s the same process. If we assume that pulling foreign investments back home is good it should be profitable for both countries. If you assume “That (pulling back foreign investments) will be a huge loss for China” it would also be a huge loss for USA. Economic laws are universal – no matter if it’s about US or China.

  68. I suppose your version of English is incompatible with the English English, as you read the words, but did not understand a single thing.

  70. Nothing China can do about it…the world is eventually going to fracture in large pieces where they can’t export their products … and each fractured piece is going to exactly duplicate the manufacturing capability of China just for that piece of the world… Europe, Western Hemisphere, Middle East and India… China… all manufacturing .. equally distributed and no products trading between them… only ideas and knowledge…

  72. He doesn’t have it “backwards” he said they same thing you did…re-read it.
    Also corporations don’t choose presidents and congressman. Yes, they can lobby, and some corrupts ones will fold, but that is the extent of their “power”.
    China is not nearly as strong as you would have people believe, they are hurting badly with this on going trade war, and decoupling will only make things worse there, plus the current Hong Kong fiasco.

  73. “General Motors produces about half of its cars in China – decoupling means that this company probably will die.”
    Too bad for them, this company should have died years ago, and/or undergone massive changes in how they do business. So such thing as “to big to fail”.

  74. It seems like Tesla has no problems opening a major factory in China, even now. Musk has previously made much of Tesla’s innovations non-patented, that is, open-source for anyone to use. He seems to prefer to just continuously out-innovate everyone else. So far, his hyper-Engineers have succeeded in doing that, not just at Tesla, but in all his companies. Why can’t other American companies do the same? Imagine where we’d be if companies invested in innovation instead of stock buybacks, dividends – which the economist William Lazonick says take up over 90% of corporate profits. I have no sympathy for companies that complain of “our” IP theft, which really just enriches shareholders; the rest of us would be better off if China copied everything, cheaper and better.

  75. Ok time for a balanced view…United states is still a western country…. not an asian country… thats why it must eventually decouple in the long run… if china were a small country ..nobody would care….but the population of china equals the entire population of the united states and western europe combined… so realistically.. in the long term china must decouple because they are not really a western country and western people dont want compete with a country that aways has a slanted playing field against their domestic companies… they want secure jobs that dont always get sucked away simply because some chinese guy has been made to look cheaper than an equivalent western wage for the same job…any why? Because they are western countries… thats part of the reason they get in this mess …they make their currencies strong to keep out the chinese and make their people stronger and richer… then it makes a mess by driving chinese trade too high and destorying domestic companies…. thus the only solution is just to kick out the chinese by destorying and sabatoging the trading system with them… thats not to say that western countries dont mind a few chinese or asian people living in their countries …thry just dont care because they are small in population percentages.

    china’s only fear is that it hasnt completely reduced the united states to a dry husk by the time the decoupling takes place.. trump is just the first president to start the decoupling…

  77. F China and their nasty system of forced human organ harvesting and constant spying on their citizens. We spend over 500 million on their products and should tax it at 100%. Mover the companies that china is craping on all around the China sea. Eliminate all imports witin one year if china does not dismantel their fake islands continue to ignore the world court. This is a vicious government so why so we continue to trade with them.

  79. Don’t be silly, no one can own knowledge.
    But, it’s best if each country restricts access to the other’s economy.
    It’s the only way China’s vast population will progress and the only thing that will force needed change in the US economy.
    We’re at the beginning of the end of the dependency on the labors of the poorly educated masses.

  80. It’s off-topic but “bad publicity” doesn’t equate with bad science.
    It’s sad that the tech that will diminish land use and abuse is being
    shunned by the “green” movement – this includes nuclear and GM.
    Maybe China realizes that more than other countries. And maybe
    tomorrow we will all be buying Chinese food and tapping into Chinese
    nuclear power.

  81. Can’t we simply, with impunity, steal their stuff, and use executive orders to ignore any court wins, that Communist Party attorney’s might win here? That got something? Fine. We take it.

  82. > Is it geopolitically prudent for a large part of the US industrial supply chain to be inside of China?

    You have it backwards, Mr Wang. Corporations have been the beneficiary of “coupling”, and they moved operations to China because it improved business, not because of geopolitical considerations. This trade war has been nothing but trouble for corporations, and they will fix that problem in 2020 or 2024, but it will be a decentralised business decision, not a geopolitical fantasy of a dead superpower. China plays for time, knowing that this problem will be fixed by the “markets”.

  83. That will be a huge loss for China. China will not be able to completely replace the supply chains brought in by US companies, with its own. The US will generally gain from so many economic assets coming back home although trade with China will be hurt.

  84. Five years ago I would never have thought decoupling would be a good idea.
    Now, I would it had been done ten years ago. As wonderful as China has been providing the American consumer with inexpensive needs, it has come at too high a price. Although, how one hides intellectual property is beyond me, we certainly shouldn’t reward China with buying what they have stole.
    In the long run China will win out but the longer we can restrain it, the better.

  85. General Motors produces about half of its cars in China – decoupling means that this company probably will die. And American food products aren’t very welcome in many countries because USA uses GMO technology. So American agriculture may have to downsize. Only China isn’t so sensitive to GMO’s bad publicity.

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