Why globalization becomes a problem after being the solution

By Antoine Reverchon

Posted today at 08:00, updated at 08:00

Originally defining in electronics the fact of separating two electrical circuits connected until now, the term “decoupling” has taken on geopolitical and economic meanings. According to the mood swings of the Atlantic Alliance, he designated the possibility of a lack of reaction from the United States to a Russian attack on Europe – for example during the Nixon or Trump presidencies – a fear which is no longer relevant at the time of the war in Ukraine. It also refers, in the reports of the Intergovernmental Panel on Climate Change (IPCC), to the hope of a separation between economic growth and growth in CO2 emissions.2. But today the word decoupling in English, and tuo gou in Chinese, refers to the tendency to reduce or even eliminate the ties of economic interdependence that unite the United States, and more broadly the West, to China: “A scenario in which the United States and China choose divergent technologies and trade standards, and rely on independent supply chains”explains Jeremy Ghez, professor of economics and international business at HEC, who coordinated a joint study on the subject by HEC, the American Chamber of Commerce and the law firm DLA Piper (“Eeconomic decoupling. Our New Reality? », December 2021).

Since the Middle Kingdom has gone from being a workshop of the world and a gigantic market to that of a geostrategic rival, since also since the Covid-19 crisis has opened the eyes of public opinion and Western leaders to our dependence masks and medicines made in China, decoupling has become a strategic option, not only for governments, but also, willy-nilly, for companies.

Credit where credit is due, it must be acknowledged that former US President Donald Trump was the first to react to the “China shock”, namely the loss of tens of thousands of industrial jobs and large market shares for Western companies facing Chinese competition (“The China Shock. Learning from Labor Market Adjustment to Large Changes in Trade »David Autor, David Dorn and Gordon Hanson, National Bureau of Economic Research, Working Paper no. 21906, 2016).

Hence the escalation, from spring 2018, of customs tariffs applied to Chinese imports, but also the ban on the sale of technological components to Chinese companies (such as ZTE, in April 2018), their exclusion from national markets “ strategic” such as telecommunications (Huawei, presidential decree of May 15, 2019), and even the New York listing, for lack of transparency on the accounts or because of the presence at their head of members of the Communist Party (“Holding Foreign Companies Accountable Act”, December 2020). The Biden presidency has maintained these measures, adding an ideological dimension of open hostility to a regime “undemocratic”.

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Why globalization becomes a problem after being the solution


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