Prof. ST Hsieh
Director, US-China Energy Industry Forum
626-376-7460
April 11, 2023
US-China tension is a global concern, especially economic decoupling is difficult to deal. Chair of the US House Select Committee on China is an elected representative with significant, if not unlimited, political swing. So, House Republican majority has declared to “selectively decouple” the U.S. and Chinese economies in certain strategic industries. The message is loud and clear.
On the other hand, Treasury (Top International) official “denies big break with China.” Jay Shambaugh, Treasury Undersecretary for International Affairs, a political appointee nominated by President Biden and confirmed by the US Senate, said “The US is not seeking to decouple its economy from China or limit the country’s growth.” He further qualified his statement by saying that “This is neither practical nor in our interest.” Will the members of the US House protest?
Voice from Europe is “That’s why a US-led radical decoupling with China is something France and Germany are trying to resist.”
What is President Biden’s China policy? If President Xi brought up the question of decoupling when Biden calls, what would be Biden’s response? To Decouple or No-Decouple is the Question?
US House committee chair ‘concerned’ by Tesla deals in China
Michael Martina and Patricia Zengerle
Mon, April 10, 2023 at 3:39 PM PDT
WASHINGTON (Reuters) – The leader of a U.S. congressional committee on China said on Monday he was concerned about electric carmaker Tesla Inc’s dependency on China, a day after the company revealed plans to open a Megapack battery factory in Shanghai.
Mike Gallagher, the Republican chair of the House of Representatives’ select committee on China’s Communist Party, said he would like to know how Tesla’s CEO Elon Musk balances U.S. government support for Tesla and its operations in China.
“I’m concerned about this,” Gallagher told Reuters when asked about the battery factory.
“Tesla seems entirely dependent, A, on the largesse of the federal government via tax breaks, and B, upon access to the Chinese market,” Gallagher said.
“The sort of deals they’ve struck there seem very concerning. I’d just be curious to know how Elon Musk balances both of those,” he said, adding that Musk’s space flight venture SpaceX was by contrast a “massive success story.”
‘THINK ABOUT SUBPOENAS’
Gallagher met last week in California with technology and entertainment companies – including Apple, Alphabet Inc’s Google and Disney – about their business dealings in China.
His select committee, which Republican House Speaker Kevin McCarthy created in January, has sought to convince Americans of the need to forcefully compete with China and to “selectively decouple” the U.S. and Chinese economies in certain strategic industries.
What decoupling? Treasury (Top International) official denies big break with China
BYVIKTORIA DENDRINOU, CHRISTOPHER CONDON AND BLOOMBERG
April 10, 2023 at 10:29 AM PDT
The US is not seeking to decouple its economy from China or limit the country’s growth, the Treasury’s top international official said on Monday.
“We occasionally have issues with different economic policies in China and we will always defend US economic interests as well — but we will not in any way be trying to separate these two economies entirely,” Jay Shambaugh, Treasury Undersecretary for International Affairs, said in an interview with Bloomberg Television’s David Westin. “This is neither practical nor in our interest.”
Relations between the US and China have deteriorated sharply in recent years as they increasingly see each other as the top strategic and economic threat. While the countries’ leaders, Joe Biden and Xi Jinping, sought a smoother path since meeting face-to-face last November, fresh disputes have arisen over issues including the security of Taiwan, spying allegations, technology security and Russia’s invasion of Ukraine.
The worsening relations have weighed on the global economic outlook, the International Monetary Fund warned last week. The fund said tensions between the US and China drive geopolitical fragmentation and risk damaging the global economy, with foreign direct investment and other capital flows increasingly being channeled toward aligned blocs of countries.
Shambaugh’s remarks come as finance ministers and central bank governors from around the world start gathering in Washington for the IMF-World Bank spring meetings, where the issue of debt relief for poorer nations is expected to feature prominently in discussions. The US and other developed countries have repeatedly blamed Beijing for being unwilling to engage in debt reduction after having ramped up lending to poorer countries.
Treasury officials will be talking to their Chinese counterparts this week, Shambaugh said, noting that the world’s two biggest economies need to be able to collaborate, especially when it it comes to addressing global issues.
“The world expects us to be able to work together on some of these big challenges whether its climate or debt,” Shambaugh said.“We’re really trying to make sure we’re working with the Chinese on these important issues,” he added.
On the US and China, Macron Says the Quiet Part Out Loud
Analysis by Lionel Laurent | Bloomberg
April 11, 2023 at 12:41 p.m. EDT
That’s why a US-led radical decoupling with China is something France and Germany are trying to resist. Memories of the Donald Trump era, when sanctions were dangled over European firms, haven’t entirely disappeared. In the book “Backfire,” former French Treasury official Agathe Demarais imagines how a direct US run-in with China would likely force European companies to stand by Washington and ditch Beijing: “In such a situation,” she writes, “many European businesses might not be able to survive.” European Commission boss Ursula von der Leyen, who traveled with Macron, made clear that strengthening the European economy and teaming up with allies around the world would help avoid it.