760 billion record: "Decoupling theory" can hardly prevent China and the United States from hitting new highs in trade

Despite the widespread talk of "decoupling", the importance of US-China relations is still clear.

A recent report by Bloomberg News Agency said that although politicians in Washington are clamoring to "decouple" from China, the Asian economic power, the trade volume between the États-Unis and China is expected to break the record.

According to the data of the United States federal government, as of November 2022, the total imports and exports of the United States and China were at least close to or even reached the highest level in history. Although the specific data of the United States will not be available until February, the annual data of Beijing shows that the Sino-US trade volume reached a record of about 760 billion US dollars in 2022.

All the signs show that although the US President Biden vigorously promoted the "Buy American" and the "Inflation Reduction Act" and other protectionist policies, the US-China trade is still increasing. Moreover, it is against the background that former President Trump launched a trade war with China.

In addition, there are some statements that the United States has persuaded some major European countries to withdraw from the Chinese market. This is not true. For example, the German auto giant Mercedes Benz still plans to continue its business in China and believes that China is a "very important market", no matter what politicians say.

In an interview with Bloomberg TV recently, Jorge Bozer, head of production of Mercedes-Benz, said that the automaker wanted to maintain its supply chain in China for the sake of toughness, reliability and low-carbon principles.

The process of globalization is to reduce barriers, which means reducing barriers between people and the goods and services they want. China has relatively cheap but skilled labor force. If it is used, goods and services can be more easily obtained. In other words, integrating China into the global supply chain will help reduce the barriers.

All enterprises want to reduce barriers, which is their natural tendency. The goal of the enterprise is to deliver its products and services to as many people as possible, which is why the enterprise did not withdraw from the Chinese market according to the plan of politicians. Because doing so will create more obstacles in the global supply chain and build a huge wall between people, goods and services.

What is special about China is that it is too important. China's role in reducing global economic friction is so critical that "decoupling" from China will set back economic development for many years. It can be said that China is the core engine of the global economy. Removing it will inevitably affect the progress of the economic wheel.

Business people are worried about the negative consequences of politicians' remarks, which is true. Sulayem, Chairman of the Board of Directors and CEO of Dubai World Port Company, told Bloomberg TV on Tuesday that "we cannot afford the consequences of geopolitical issues". He said that businessmen knew how to run their own businesses and make money, but they could not predict what the leaders of the country would do.

This is a very enlightening point of view, because even the threat of "decoupling" will cause panic, and bad emotions will eventually affect reality. For this reason, politicians in Washington should moderate their tone. They are the prime culprits in the harsh language of trade policy. We can see that "decoupling" has not happened - to be honest, no one really wants it to happen. But the constant clamor for "decoupling" will only cause unnecessary trouble.

The recent meeting between Chinese and American officials is a good example of how problems between the two countries can be resolved amicably. I hope this will help reduce the diplomatic friction between Washington and Beijing.