Chinese Economists Warn Beijing to Prepare for U.S. Breakup

An economic decoupling from the United States is looking more likely and China should get ready, scholars in Beijing warned on Saturday, a year after President Donald Trump fired the first shot in the trade war, South China Morning Post reported.

The break-up of the world’s two biggest economies was gradually becoming a real possibility as Beijing and Washington clashed over issues beyond trade and the White House sought to push China out of global value chains, according to Li Xiangyang, director of the National Institute of International Strategy, a think tank under the Chinese Academy of Social Sciences, SCMP added.

“This economic decoupling is completely possible, in theory,” Li told a symposium on the trade war at Renmin University of China on Saturday.

On July 6 last year, Washington imposed the first round of punitive tariffs on US$36 billion of Chinese imports, with China retaliating by levying duties on the same amount of American goods, marking the start of their tit-for-tat tariff battle.

But the rivalry has spilled over from trade to technology and security, with some observers even warning of a “new cold war” emerging.

“The ultimate target [of the United States] is to contain China’s rise … this is a life-or-death game [for them],” Li said, adding that decoupling could be seen as “strategic blackmail” for Washington to try to prevent China from growing stronger.

He made the remarks as debate heats up in both the U.S. and China about a potential economic decoupling, SCMP adds.

Chinese President Xi Jinping told an economic forum in St Petersburg last month that he did not want a decoupling from Washington, and he doubted Trump did either.

Foreign ministry spokesman Geng Shuang later said decoupling was a “very dangerous and irresponsible argument” that would in no way gain support.

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