China’s response to US-led new Cold War: decoupling VS integration

By Mehmood Ul Hassan Khan | Gwadar Pro Apr 7, 2023

Editor's Note: The author is Executive Director of the Center for South Asia & International Studies (CSAIS) Islamabad and Regional Expert on China, BRI & CPEC. The article reflects the author's opinions and not necessarily the views of Gwadar Pro.

Most recently, the World Bank has published its report on East Asia and Pacific and forecasting its GDP ratio up to 5.1 percent during 2023 mainly because of the Chines healthy, positive and productive macro-economic prospects during 2023 and beyond.

Unfortunately, the East Asian region is going to become new playing field of Cold War between the US and China and the US government and its policy makers have intentionally started a new political chessboard in the region to contain China.

It seems that world is leading towards geopolitics to geo-economy conceptualization and ironically the US is trying to reverse it through its chronic geopolitical intentions, geo-strategic contentions, socio-economic contradictions and secret conspiracies in the region.

Despite the US constant and continued China containment policy and formation of anti-China socio-economic, geopolitical and geostrategic alliances in the region, China remains a key hub in East Asian production networks and an increasingly important source of value-added even for U.S. allies and partners.

In this connection, in pure economic perspectives, the role of China’s hub-ness is on the increase by each passing day in the East Asia Region (EAR). According to Financial Times, China has overtaken the European Union (EU) and the United States as the main trade hub for the Association of Southeast Asian Nations (ASEAN) and Northeast Asia and subsequently, EAR trade with China has also been getting momentum.

Furthermore, many published reports of the World Bank, IMF and Asian Development Bank have clearly highlighted China’s rise in regional production networks of EAR especially, in electronics manufacturing. Now, it is impossible to manufacture electronic products without Chinese-made components, which is an undeniable fact that reflects China's excellent technological level and huge production capacity. Therefore, the US decoupling against China will achieve nothing but further lessen its role in EAR in the days to come.

Chinese qualitative modernization, opening-up and constant persuasions of technological advancement has further marginalized the role of the US in the diverse sectors of economy, investment, production, innovations, joint venture, trade & commerce and AI in the EAR.

Most of the regional economies have become reliant on Chinese inputs and trade ties for achieving the goals of their national development. China has been the reliable partner, trustworthy supplier and champion of supply chains for many regional countries.

It has been fostering production capacity and process of industrialization of the regional countries for the last two decades which vividly reflects its policies of regional cooperation, shared prosperity, immense socio-economic integration, greater regional connectivity, openness and modernization.

Dialectic analysis reveals that China has pursued a unique and integrated production and investment-based growth model in these countries which have achieved win-win proposition for all the regional countries.

On the other hand, the United States applies bloc mentality, imposition of unilateral socio-economic sanctions and hegemonic and self-preferential economic and production model and resultantly its role and share in the regional quick economic recovery, production cycle, social development and investment is on the decline. Most of the regional countries prefer to be with China for achieving their respective goals of socio-economic prosperity and industrialization.

The Xi policies of Global Development Initiative, Global Security Initiative and now Global Civilizational Initiative have further strengthened bilateral trade ties and economic integration in EAR, which is commendable.

Interestingly, China has become an ideal destination of exports, and source of financial capital. Economic has become biggest equalizer despite misadventures of geopolitics initiated by the US and its regional allies are rampant, economic integration has pushed back the wandering souls of hegemony and imperialism through integrated and coordinated regional integration through the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Hopefully both economic partnerships would mitigate cost losses from a US-dominated market.

The US government has been changing its terminologies i.e. from trade war to technology war which has now been further morphed, into a much wider economic war consisting of trade, technology, CHIP, FDIs, capital markets and currency competition against China’s peaceful policies. Decoupling has now formally become battle-cry of the successive leaders and strategists of the US which clearly shows its decline.

The ongoing rigorous diplomatic efforts of the Chinese government by inviting, the leaders of Singapore, Indonesia, Malaysia, Philippine, Vietnam and other regional countries have vividly reflected its spirits of removing the prevailing uncertainty through solidarity, cooperation, opening-up, modernization and last but not least, qualitative development with all these countries.

It seems that the Chinese economic diplomacy has become darling of the regional integration and socio-economic cooperation in the East Asia and Pacific Regions. Even the most recently published report of the Boao Forum for Asian predicted China’s stimulating, supporting, constructive, productive and participatory role on the growth of all the regional economies.

The World Bank report seriously warned that many regional countries have shown their concerns about the US’s practices of decoupling and disruption of industrial and supply chains and trade protectionism, which destabilize the industrial and supply chains which posing serious threats to regional economies, productive channels and process of industrialization.

After the recently Two Sessions, China has already started more high-standard opening-up, add more certainty to the world with its stability, and provide new opportunities to the world with its new development. It advocates win-win cooperation, openness and inclusiveness; oppose bloc mentality and Cold War orientations.

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