Decoupling

With the foreign ministers of the US, Japan, India, and Australia convening in Tokyo for their latest ministerial quadrilateral security dialogue meeting last week, and the US especially keen to contain China through this grouping, economics professor Zhu Ying wonders: Will the Quad become an Asian mini-NATO?

Much attention has been focused on the burgeoning US-China tech war and the US’s suppression of Chinese companies. But less is known about China’s firm hold on the rare earths supply chain, which has the potential to derail the world’s production of products from the humble smartphone to F-35 aircraft and guided missile systems. In response, the US and its allies, including the EU, Japan and Australia, are actively coalescing around new rare earths strategies. But private investment alone will not be enough to challenge China’s global monopoly in rare earths. Can new international public-private partnerships be the answer?

After a brief softening of its stance towards the US, China seems to be hardening its rhetoric again. Zaobao correspondent Yang Danxu says this has much to do with President Xi Jinping’s clear message not to trifle with the Chinese Communist Party’s bottom line — relations between the party and the people are sacrosanct.

​After days of delay, the US and China reviewed their phase one trade agreement in a telephone call on 25 August. Both sides sidestepped the question of recent US actions against Chinese companies, but there is no guarantee that this uneasy truce will hold up as the 2020 US presidential race intensifies.

Senior research fellow at the East Asian Institute Lance Gore says that China must learn to rein in its rage and impatience and do its fair share of self-reflection. What good would it do if it gives in to petty emotions and provokes a US-led coalition against it? For sure, it still has room for manoeuvre, thanks to the attractiveness of its huge consumer market. But it must not miss the woods for the trees: the US is still more powerful than it is and the two are better off as friends than enemies. Question is, will China be able to be humble, look itself squarely in the mirror, and refrain from doing the things it must not?

As the coronavirus continues to affect supply chains worldwide, especially with China being a key hub, Japan is taking steps to diversity its sources and be less reliant on China. However, contrary to previous speculations, Japanese academic Shin Kawashima does not think that the Japanese government is attempting to decouple from China, in the way that the decoupling of advanced industries is being carried out in the US.

In the post-Covid-19 world, global supply chains are expected to be reconfigured as countries look to reduce their reliance on China. Enter greater room for ASEAN-China cooperation, particularly in areas related to the digital economy, such as in the development of smart cities. Associate Professor Gu Qingyang of the Lee Kuan Yew School of Public Policy (LKYSPP) sets out the arguments.

Convinced that China has been stealing information and know-how through people insurgents at all levels, the US is making haste to withdraw opportunities for Chinese to tap on US innovation in any way. Thus far, experts of Chinese descent who work in particularly sensitive fields in the US are facing the brunt of increased scrutiny. Does this signal the end of long-held American generosity and openness in sharing knowledge, at least as it applies to the Chinese?