Decoupling effort shows US underrates China

By Wang Jiamei Source:Global Times Published: 2019/9/29 20:32:05

A trader works at the New York Stock Exchange in New York, the United States, on May 13, 2019. (Photo: Xinhua)

Some fanatical US hawks need to take a closer look at what the Chinese economy has achieved over the past 70 years, instead of devising crazy ideas about a US-China decoupling. Why? Because they are playing with fire and seriously underestimating the development of China's manufacturing industry and companies.

The news that the Trump administration is considering delisting Chinese companies from US stock exchanges seems to be the latest attempt at a decoupling. The move is said to be part of a broader effort to limit US investment in China. 

Major US stock indexes fell following this news on Friday, with US-listed shares of Chinese companies tumbling. Alibaba sank 5.15 percent, was down 5.95 percent, and Baidu Inc declined 3.67 percent.

US Treasury spokesperson Monica Crowley was quoted in a Saturday report as saying that, "The administration is not contemplating blocking Chinese companies from listing shares on US stock exchanges at this time." The denial is likely only an attempt to reassure the market.

Whatever the real intentions of the US Treasury are, the news itself is expected to have significant repercussions for the Chinese and US economies, as well as their companies, in the future. Nowadays, certain US hawks are relentless in seeking a decoupling from China, which has already caused disruption to normal business operations and financial markets.

One of the possible consequences of the uncertain ban on Chinese listings is that US-listed Chinese companies may start considering contingency plans, or at least restrain their business expansion in the US, given rising uncertainties from the US-China trade war. US companies that have investments in China may also need to think about the same issues. In the end, the US will see its remaining growth impetus depleted by concerns over future risks and policy uncertainties.

Some US politicians seem to believe that a decoupling from China will be simple and that it won't significantly impact its economy. 

Such an arrogant belief in reality underlines a serious underestimation of what the Chinese economy and Chinese companies are capable of today. After 70 years of development, China has built a world-class manufacturing industry, and has an independent and complete modern industrial system. 

It was during the development process that a number of outstanding Chinese companies emerged, some of which are now listed in the US. 

It should be noted that the listing of Chinese companies in the US is not just beneficial to China, but also to US investors. And the future growth of these Chinese companies may mean a lot more to US citizens, especially those with a 401(k) plan.

It is foolish for US hawks to try to decouple. After all, it is US consumers and investors that will bear the costs.

The author is a reporter with the Global Times.


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