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As the pandemic fuels growing worries about extended supply chains and a growing distrust of China the concept of de-coupling is gaining traction. What lies behind this change in mood is a general sense that the UK, and the West, has become too reliant of China economically leaving us vulnerable. The solution proposed by some is to disengage, or de-couple, from China. But what this means in terms of policy is often far from clear.
To find out more Reaction’s business reporter, Joseph Rachman, interviewed George Magnus the former chief economist of UBS who is now an associate at the China Centre at Oxford University, and a research associate at the School of Oriental and African Studies
What does decoupling really mean in practice? The first shot in the UK was perhaps Huawei. In America we saw the trade war and the recent ban on TikTok. Is it going to remain focused on tech, or will it expand in new ways with potential mass reshoring of industrial production?
I don’t think that bringing back a lot production from China to the United Kingdom, or to the United States, or anywhere else for that matter, is a realistic proposition. I don’t even think that that is the goal necessarily. When the Americans in particular talk about de-coupling the Chinese talk about the same kind of thing, but they call it self-reliance. Essentially, it’s a variant, or a form, of economic nationalism but one in which where the high level of economic interdependence which has been established between China and the rest of the world is at least partially intended to reverse.