CHINAMacroReporter

‘Beat China: Targeted Decoupling and the Economic Long War'

‘The economy is the primary theater of our conflict with China. It is now clear that the U.S. and Chinese economies are too entangled, particularly in critical sectors such as medicine, defense, and technology.'
by

Tom Cotton | U.S. Senator

|

Office of Senator Tom Cotton

February 20, 2021
‘Beat China: Targeted Decoupling and the Economic Long War'
BIG IDEA | ‘The economy is the primary theater of our conflict with China. It is now clear that the U.S. and Chinese economies are too entangled, particularly in critical sectors such as medicine, defense, and technology.'
'The urgent task for policymakers and businesses is to end our dependence on China and build new capabilities in America. The U.S. government needs to pursue targeted decoupling with China.’

‘The Trump administration’s most consequential policy will prove to be, in my opinion, a tougher stance against the People’s Republic of China.’

  • ‘This approach deserves praise, and it ought to form the starting point for a long-term, bipartisan national strategy.’

‘The ultimate objective of that strategy should be, to quote the document that launched this country’s ultimately successful strategy against the Soviet Union, the “breakup or the gradual mellowing” of the Chinese Communist Party’s (CCP) power.’

  • ‘Our strategy must take seriously the critical military, diplomatic, intelligence, and propaganda challenges posed by Beijing.’

‘The economy is the primary theater of our conflict with China.’

  • ‘It is now clear that the U.S. and Chinese economies are too entangled, particularly in critical sectors such as medicine, defense, and technology.’
  • ‘The urgent task for policymakers and businesses is to end our dependence on China and build new capabilities in America.’

‘The U.S. government needs to pursue targeted decoupling with China.’  

  • ‘America can reduce its dependence on its chief global rival by, for example, cutting off China from high-end semiconductor designs and equipment, sanctioning Chinese companies that steal and benefit from U.S. intellectual property, and preventing the federal government from buying products that contain Chinese active pharmaceutical ingredients and Chinese rare earths and critical minerals.’
  • ‘At the same time, the United States can make investments to mitigate the effects of decoupling by, for example, boosting federal research and development (R&D) funding, rebuilding the STEM (science, technology, engineering, mathematics) talent pool, and restoring secure, scalable, domestic manufacturing in key sectors.’
  • ‘Finally, this strategy demands a careful look at how key elements of the federal bureaucracy are organized and incentivized to fight the economic long war.’

My Take

Just as the Biden team is crafting its China policy, so are the Republicans.  Or I should say individual Republicans.

Republican Senator Tom Cotton is among the first to present comprehensive recommendations.

At the broadest level, there's not much to dispute.

Yes, we do need to build resilience into the supply chains of specific critical sectors - 'targeted decoupling.' And, yes, we do need to strengthen the U.S. economy and industry.

With what we see of the emerging Biden China policy, it may mesh in many ways with Senator Cotton's views and no doubt that of many other Republican leaders.

Does that mean we are on the way to a bipartisan understanding of how to meet China's challenges? No matter how necessary that is, don't count on it.

In any case, I repeat that China policy comes from the Congress as well as the Executive Branch. You should be watching both.

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