Numbers are not questioned.From the constituent of the US trade deficit, gradually get rid of China's changes, and the separation of this trade transfer with China -centered supply chain, decoupled footprints have been obvious.Whatever is to call it, it is a gradual step on the risk or decoupling road, which cannot avoid the harmful effect on the US economy.
The history of American politicians to disrupt economic policy debate has a long history.Some people will acknowledge reality, such as when George H.W. Bush describes the so -called supply -side tax cutting policy as "virus economics".But there are too many people distorting economic statistics and analysis to achieve their own political purposes, such as "modern currency theory" or those "deficit scolds".
The current debate on the United States and China is a good example.Starting from President Biden, U.S. policy makers have finally realized that it is meaningless to advocate comprehensive decoupling.The Minister of Finance Yellen claims that this would be "catastrophic". State Secretary of State Brillin and National Security Consultant Sha Liewen also denied this possibility, emphasizing that the record of bilateral trade in the record has initially proved.Economy, it is impossible to happen at all.
But looking at these numbers can make us make a more detailed assessment.The total amount of bilateral trade (goods and services) in the United States and China reached a record 760.9 billion US dollars (about S $ 10.6 billion) in 2022.It also broke the record, and these numbers are expressed in the name of the US dollar that has not ruled out inflation.According to the current inflation environment, the current US dollar valuation of many indicators is refreshing the record almost every day.This does not have much role in understanding the ups and downs of actual economic activities.
Using GDP levels to measure cross -border trade can more accurately measure the role of trade in China on the US economy.On this basis, the amount of bilateral goods and service trade in the United States in 2022 was equivalent to 3%of the US GDP, a decrease of 0.7 percentage points or 19%from the peak of 3.7%in 2014.Even though this is completely decoupled (which means that the proportion of US -China trade is close to zero than zero), it is undoubtedly a clear step in this direction.
Unsurprisingly, 75%of the recent decrease occurred after the Trump administration levied high tariffs on high tariffs on China's imported goods in 2018.The decline in the share of China's overall trade imbalance in the United States is likely to continue, especially if the Bayeng government maintains tariffs during the Trump period as expected, and impacts a new round of sanctions on advanced technologies.
This possibility highlights a key factor that most politicians ignore the debate around the decourse debate: the macroeconomic foundation behind the overly huge trade deficit of the United States.Although the trade imbalance with China was eased in 2022, the total trade deficit between the United States and 106 countries (including China) still reached a record of 1.18 trillion US dollars.
Just as I didn't tirelessly emphasized before, this is a unfortunate but natural result of abnormal shortage of domestic savings.In the first quarter of 2023, the domestic net savings rate in the United States fell to -1.2%equivalent to national income. It was the weakest data since the global financial crisis in 2008, and it was far below the average level of 7.6%from 1960 to 2000.Therefore, the United States, which lacks savings and wants to invest and grow, has to use large -scale international revenue and expenditure and multilateral trade deficit to attract foreign capital.
For American politicians, a disturbing reality is that if the problem of budget deficit does not solve the problem of budget deficit, the problem of insufficient savings as a multilateral imbalance in the United States will continue to exist.This means that targeted bilateral operations (here refer to tariffs and sanctions against China), and cannot solve trade problems.
It is at this point that the decoustal theory has a extremely ominous turning.Since the outbreak of the Free Trade War, although China's share in the overall commodity trade deficit in the United States is still the largest among all countries, it has dropped from 47%in 2018 to 32%in 2022.The total share of six countries and regions in Canada, Mexico, India, South Korea, Taiwan, and Ireland rose from 24%to 36%during the same period.This trade transfer is not surprising.This is inevitable for any economy that imposed tariffs on major trading partners or savings for sanctions.
The trade with China is particularly potentially harmful, because it transferred the deficit from low -cost imported goods providers to high -cost producers.This is also one of the reasons why most economists speak loudly that protectionism is eventually tax on domestic companies and consumers.Washington apparently darked these voices.But in fact, squeezing China's political effect is basically equivalent to re -sorting the lounge chairs on the Titanic deck.
Yellen, as a first -class economist, knows this.In a sense, she said that "trying to decompose with China will be disaster", which she said in the exchange of the Financial Services Committee of the House of Representatives on June 13, which is correct."Risk? Yes. Development? Absolutely not." However, this is a wrong dual method.The completely decourse is just a scarecrow who is regarded as a target, and the reality is far more than that.
However, this reality runs counter to the increasing geopolitical concerns.The Biden government imitates European approach, trying to re -build debates about economic decoupling from a security perspective, emphasizing that it can now implement "de -risk" on the grounds of national security, or reduce excessive dependence on China's supply chain.
Although this argument is questionable, the number is not questionable.From the constituent of the US trade deficit, gradually get rid of China's changes, and the separation of this trade transfer with China -centered supply chain, decoupled footprints have been obvious.Whatever is to call it, it is a gradual step on the risk or decoupling road, which cannot avoid the harmful effect on the US economy.American politicians once again tried to confuse the facts and shifted the topic.
Author Stephen S. Roach is a senior lecturer at the School of Management of Yale University, former chairman of Morgan Stanley Asia Investment Co., Ltd. The latest book is unexpected conflicts: the United States, China, and the collision of wrong narratives (accountal conflict: American, China, China, Chinaand the clash of facese narrates)
English Original Title: US-China Decoupling by the Numbers
All rights reserved: Project syndicate, 2023.
