Nationally, China has implemented some recent policies that decouple trade with the West. This applies particularly to the export of some of the rare earth materials used in semiconductor and military applications. This is usually considered to be part of a tit-for-tat exchange in response to US bans on computer semiconductors and other products. However, it is also part of a broader context of China’s decoupling from the West.
This is not to say that China will abandon these markets. Instead, it suggests that China will reduce its reliance on these markets and instead seek to open new markets. This process is consistent with the development and expansion of the Belt and Road Initiative.
It is a fair to say that most readers who see this week’s headline will assume the story is about the US and the West decoupling from trade with China. This is certainly consistent with President-elect Trump’s most recent pronouncements. It also follows the high-profile decoupling with the earlier ban on Huawei and Chinese drone makers.
However, that perception would be wrong. Instead, more Chinese companies are choosing to decouple from the US and the West. Huawei was forced into decoupling by the imposition of sanctions and trade bans. The tech company’s reaction, survival and growth is an example of what has become broader market trends.
