The United States is officially shifting its Chinese strategy from “decoupling” to “derisking.”
On June 4, White House National Security Advisor Jake Sullivan said in a CNN program, “The U.S. economy does not seek to decouple from China, it seeks to derisk it.” This came more than two months after he mentioned derisking in a speech at the Brookings Institution in April.
Whereas decoupling is the concept of completely excluding China from traditional global supply chains, derisking is a strategy that focuses on removing risk factors. The idea is to continue to have a relationship with China, but to exclude key areas that could impact U.S. security.
The term “derisking” began to draw much attention at the Group of Seven (G7) Hiroshima Summit in Japan in May. In a joint communique adopted on May 20, the G7 leaders agreed to diversify their approach for economic resilience and economic security, deepening partnerships among countries, and derisking rather than decoupling as measures for economic security. They replaced the term decoupling used to describe economic security logic and actions between the United States and China with the term derisking.
The first person to use the term derisking on the international stage was European Commission President Ursula von der Leyen. “We need to adjust our strategy about relations with China to derisking, not decoupling,” she said at the World Economic Forum (WEF) in January. She elaborated on the concept of derisking as envisioned by Europe in a speech at the European Policy Center in March. “Relationships between China and Europe are not black and white, so decoupling that completely excludes China is neither feasible nor in Europe’s interest,” she said, emphasizing the importance of derisking as a two-step strategy which mitigates diplomatic risks through open and frank dialogues with the Chinese side, and then eliminating economic risks.
“Today, U.S.-China relationships are clearly tense,” United States Secretary of Treasury Janet Yellen said. “China’s economic growth can stand with U.S. economic leadership.” This suggested that Yellen had a clear derisking strategy.
Source : Business Korea
