Sunday, September 11, 2022

China is Next - Vox Popoli

 The USA’s European satrapies have apparently been ordered to start reducing their economic ties with China:

Germany’s economy ministry is considering a range of measures to make business with China less attractive as it seeks to reduce its dependency on its major trading partner, according to a Reuters report. Sources familiar with the matter revealed that the measures may include reducing or even scrapping investment and export guarantees to China in addition to reducing participation in trade fairs and scaling basic training for local employees.

There have been ongoing discussions in Germany about “overdependence on China,” especially since Scholz assumed office. Despite the impact of the COVID-19 pandemic and the Russia-Ukraine conflict on Germany’s concerns about the security of its industrial and supply chain, its economy ministry’s consideration over measures is essentially related to a policy shift away from China.

It’s legitimate for a country to be concerned about its high level of external dependence and long-term economic security. However, it is unrealistic to unilaterally emphasize a so-called “decoupling.” After all, China and Germany cannot be decoupled considering the strength of two-way economic ties. It’s understandable for Berlin to assess adjusting and diversifying the supply chains in order to safeguard the stability. What is unacceptable to China is using “reducing dependency on China” as a pretext of “decoupling” while accusing China of being “unreliable,” which is a discriminatory and targeted attack on a major trading partner.

It would appear that the second front is in the process of coming, and that the US doesn’t wish to get caught off-guard as it was by Russian preparations for Western sanctions. But so much of the Western economy is reliant upon Chinese manufacturing that it’s hard to imagine the effect being less catastrophic than the consequences of sanctioning Russia have been.