"Risk reduction" is the biggest risk. Global | Economic | Risk

Beijing, June 3 (Xinhua) - The United States verbally replaces "decoupling theory" with "risk reduction", but continues to piece together the "containment puzzle" of "de sinicization" in action. Just after the G7 summit, the United States recently convened a ministerial meeting on the Indo Pacific Economic Framework and a meeting of the US EU Trade and Technology Commission, with the aim of wooing allies to build a "parallel system" that excludes China. This practice of dividing the world under the guise of "risk reduction" poses enormous risks to the deeply integrated global economy.

Concepts are the foundation of thinking, and the United States promotes the concept of "risk reduction" by misleading the international community to think in the direction it hopes and draw favorable conclusions. The United States has convened international conferences and repeatedly promoted the issue of containing China within the framework of "risk reduction", with the aim of equating China with "risk" and luring allies from the forced state of "decoupling" from China due to US pressure in the past to a spontaneous state of "risk reduction" and then "de sinicization", in order to assist the United States in achieving its overall "decoupling" containment strategy against China.

This is a photo of the White House taken on January 20th in the US capital, Washington. Photo by Xinhua News Agency reporter Liu Jie

Whether to "de risk" or "decouple", don't listen to what the United States says, the key is to see how it does it.

The essence of "risk reduction" is very straightforward in the American media. A recent article in Foreign Affairs magazine pointed out that the United States' push for the concept of "risk reduction" actually restricts China from three aspects: limiting China's ability in strategic areas related to national security, such as chips; Restrict China's position in key raw materials and their processing, such as rare metals; Restrict the impact of the Chinese market on a global scale. At the end of the day, the core of "risk reduction" is to create a "small courtyard and high wall" targeting China, and to carry out more refined "disconnection and decoupling", aiming to exclude and suppress China, maintain the center and monopoly position of the United States in the world economic system. Therefore, "risk reduction" is false, and maintaining hegemony is true.

Named "de risk", it actually means "de sinicization" or even "de globalization". The formation and development of global industrial and supply chains are the result of the combined effects of market laws and corporate behavior. The United States politicizes economic and trade issues to restrict China's development, coerces and induces some countries to restrict exports to China, and impacts the stability of global industrial and supply chains. However, China is the world's second-largest economy, a major trading partner of over 140 countries and regions, and the largest manufacturing country. The world cannot do without China. The United States coerces other countries to choose sides between China and the United States, which not only seriously disrupts the normal operation of the global market, but also exacerbates the chaos of the global economic governance system, triggers international rule competition and conflicts, and has a huge impact on economic globalization.

On July 5, 2022, workers were working on the production line in the assembly workshop of CRRC Zhuzhou Electric Locomotive Co., Ltd.'s urban rail business unit. Photo by Xinhua News Agency reporter Chen Zeguo

The international community has issued a stern warning about the global risks caused by "de risk". Singapore's Deputy Prime Minister Huang Xuncai pointed out that voices targeting China to "de risk" rather than "decouple" will also lead to a more fragmented and "decoupled" world economy. "A fragmented global economy will divide the world into competing regional groups. Trade, investment, and the dissemination of ideas will decrease - all of which were key factors that helped us achieve economic progress.". Schwab, founder and executive chairman of the World Economic Forum, believes that open global trade benefits all countries, and the decoupling of global trade and investment will further pull up the current "heating curve" of the world economy, manifested as high inflation, high debt, and low growth.

So, is it feasible for the United States to promote "de Sinicization" under the guise of "risk reduction"? The answer is negative. The United States is at least saddened by the "three hurdles": firstly, for enterprises, the US should artificially change the mutually beneficial market pattern of Chinese and American enterprises, such as sailing against the tide. After all, enterprises are the most important market entities, and they pursue profits and will not completely follow government orders and violate market laws; Secondly, for consumers, leaving "Made in China" means higher prices and higher inflation rates; Finally, for allies, American companies are trying to pull them together to contain China, but for the vast majority of countries, including European countries, this not only goes against their interests, but also incurs high opportunity costs.

Currently, China's economic ties with other countries around the world are so close that the cost of decoupling or de risk from the Chinese economy actually far exceeds the expectations and affordability of some countries. More importantly, in the eyes of the vast majority of countries, China is not a "risk" at all, but an opportunity. As the Brookings Institution website questioned in an article, "Which country would think that China's economic growth itself would be a risk to them?" Over the past 40 years of reform and opening up, China has accumulated huge advantages in infrastructure, market size, talent reserves, and industrial clusters, which have formed a strong "magnetic field effect" on global business forces. These advantages and the opportunities they contain will inevitably hedge against the United States' hegemonic strategy of suppressing China.

The Model Y car was photographed on January 18, 2021 at the Tesla Center at the Shanghai World Expo. On that day, Tesla's Model Y model, manufactured in China, officially began delivery in Shanghai. Photo by Xinhua News Agency reporter Ding Ting

Tesla CEO Musk recently visited China. In his meeting with Chinese State Councilor and Foreign Minister Qin Gang, Musk compared the interests of the United States and China to that of a conjoined baby, believing that they are inseparable, and clearly expressed his opposition to "decoupling and disconnection". He is willing to continue expanding business in China and sharing development opportunities in China. Almost simultaneously, JPMorgan Chase CEO Damon and Starbucks CEO Narasinghan came to China one after another. Earlier, General Motors CEO Bora also visited Shanghai, and Apple CEO Cook appeared in Sanlitun, Beijing... Foreign investment was hot, China's opening up was strong, and the final result was difficulty in manipulating decoupling.

No matter how hard American politicians try to use their words and phrases, they will ultimately be unable to resist market rules, cut off industrial connections, block Sino foreign exchanges, and even hinder China's path to peaceful development and rejuvenation. Surrounding and isolating the Yangtze and Yellow Rivers will ultimately only make oneself dry up.