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An Honest Opinion: Can the West Decouple from China?   

I have a feeling that even though the West is trying to decouple from China, with job loss increases during an ongoing pandemic, I don't see how a country like the United States can bring jobs home since unemployment is going to be high still. By this, I feel that with more people relying on the government to create jobs and whatnot, bringing jobs home means companies in the United States have to hire more and spend more to produce anything. Meanwhile, China is once again increasing the output of their manufacturing, albeit that wages are increasing in China, the living costs in China are still way cheaper than in the West, and so I think their wages won't be rising to a point that foreign companies want to shift their manufacturing bases away from China faster. After all, producing in China does save on the costs of shipping and exporting.

Producing at home means that local companies have to be able to produce things cheaper than their foreign imports. Usually, imported stuff should be more expensive than locally made since there are import costs and shipping costs that would add on top of the costs of the goods that are being made elsewhere. Unfortunately, it also depends on how productive a local manufacturing base is and other variables such as how cheap the local wages are and whatnot. Furthermore, we also have to worry about how the local economy is doing. To add salt to the already infected wound, the COVID-19 pandemic is still an ongoing thing. So, I don't see how decoupling from China is easy at all.

When we are trying to decouple from China, we should be prepared for China's backlash such as how China would ramp up its distaste for foreign products even though most of these products are being produced in China. For an instance, China could ramp up the investigation into foreign companies that are actively opened for business in China, and by doing this China could persuade its people to trust less on foreign imports.  By doing this China could also support their local economy through locally made, and so in the long run China would be less exposed to foreign imports. I also see that China is producing much more stuff for foreign countries than foreign countries produce stuff for them -- in a way why would China import more stuff when they could make everything at home?

As the United States tries to ramp up the pace of decoupling with China, China could see itself ramping up the pace of relying less on foreign imports. Meanwhile, China could also make it a lot harder for foreign companies to operate in China. At home, Western companies are facing the uglier local economy, so these companies may not be able to produce higher revenues from local markets. Now, with geopolitical conflicts between China and the United States, it would make it a lot harder for Western companies to make profits in China. Of course, Asia is a big place, so Western companies should be able to ramp up their marketing elsewhere! The question is can other places replace the loss of the Chinese market?

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Vinh Nguyen

"Rinse, repeat, born again, a clean slate advantage, but one needs to relearn everything again! Such a case relies on true, noble historians."

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