Trade relations between the US and China have been frozen by the trade war. The trade in microchips and the continuation of spy balloons also play a role. Jasper Roctus, an expert on Chinese and Oriental languages and cultures, spoke Business AM About the tension between the superpowers.
Listen to the full interview here:
Essence: Sino-US relations took a turn for the worse in 2018 when Donald Trump was president.
- “Recently there have been some attempts to rekindle relations, such as the Joe Biden and Xi Jinping meeting in Bali. There was also a visit by Blinken earlier this year, but that didn't happen after the balloon incident,” says Roctus. “Meanwhile, it goes on and on. The US is now building a lead in the microchip industry against China, with some success.
- Meanwhile, trade between the US and China has risen to more than $600 billion.
- A complete disconnection between the two countries would cause total economic disaster. “The World Trade Organization considers that this could lead to economic damage of up to 10 percent worldwide, and that all related chains would be indirectly significantly affected,” the expert says.
- “But we're not there yet. Disconnection is almost impossible. We're too interconnected for something like this to happen. We also see that America's cautious efforts to disconnect in some areas have not yet succeeded,” it said. But this is about a branch of more modern chips. “We still have to see if it actually delivers results at a commercial level.”
- By the way, disconnection doesn't benefit anyone. Not America, not Europe, not China. “In fact, if one of the three superpowers can still reasonably continue to operate, it's the United States, which has its largest domestic market,” says Jasper. If so, China will lose its export market completely.
Influence of Europe
- Commission President Ursula Von der Leyen this week talked about a new term: 'de-risking EU-China relations'. “She hasn't fully specified what that means yet, but she's indicated that the decoupling doesn't work, but we have to make sure we run the small risk of being dragged into a conflict between the US and China.”
- China also insists that Europe should be strategically autonomous, thereby making the EU less dependent on the United States.
- “The difference with the US is that there is no united front within the EU against China in Europe. Some countries in Europe still do not want to participate. In that area, China still has opportunities within Europe to ensure that it is not too close to the US,” concludes Jasper.
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