米国務省のホセ・フェルナンデス次官は、米国と中国経済を切り離す「デカップリング」を志向していないと強調した。中国企業向け輸出規制や制裁について公平な競争条件を整えることが目的だと訴えた。
The U.S. is not interested in decoupling its economy from China’s but only in ensuring fair competition between the countries’ businesses, Jose Fernandez, a senior state department official, told Nikkei.
米国務次官「中国とデカップリング志向せず」
日本経済新聞
https://www.nikkei.com/article/DGXZQOGN21ADC0R20C22A9000000/
U.S.-China decoupling not Washington’s goal: diplomat
State Department’s Jose Fernandez signals further involvement in Asia through IPEF
Nikkei Asia
https://asia.nikkei.com/Editor-s-Picks/Interview/U.S.-China-decoupling-not-Washington-s-goal-diplomat
The U.S. is not interested in decoupling its economy from China’s but only in ensuring fair competition between the countries’ businesses, Jose Fernandez, a senior state department official, told Nikkei.
“We would welcome competition that’s on a level playing field, where you don’t have unfair subsidies, where you have no violations of human rights, where you have full respect for intellectual property rights,” said Fernandez, who serves as the undersecretary of state for economic growth, energy, and the environment.
He is deeply involved in U.S. President Joe Biden’s economic security policies.
“We just want [U.S. companies] to have a fair shot,” Fernandez said. “We are sure that if our companies play on a level playing field, we will get our share of projects and wins.”
The Biden administration has imposed tougher restrictions on exports to, and investment from, China in the tech sector. When asked whether it was inevitable for the U.S. and Chinese economies to decouple, Fernandez said, “We are not advocating — you won’t hear anybody advocate — a decoupling of our economies.”
Ministers from the countries participating the Indo-Pacific Economic Framework met in Los Angeles in early September, where they laid out negotiating objectives for the U.S.-led trade initiative. Asian partners want the U.S. to be active there “because if we retreat commercially from the region, others will step in and they will set the rules,” Fernandez said, in an indirect reference to China.
“We believe that the postwar economic order has been good for the world’s economy, including for China,” he said, signaling the U.S. commitment to existing trade and economic norms.
Biden is considering a meeting with Chinese President XI Jinping on the sidelines of the Group of 20 summit in November in Indonesia.
“We talk to our competitors all the time,” Fernandez said, but declined to comment on the desired outcome of the meeting.
In terms of the war in Ukraine, Fernandez said the U.S. will continue to engage with the international community to bolster sanctions against Russia.
“We will continue to talk to countries all around the world about the reasons why it’s important that we make sure — for the future of our children, for the future of our grandchildren — that [Russian President Vladimir] Putin’s war of aggression in violation of international law” and basic human rights “is not rewarded,” he said.
On Friday, Indian Prime Minister Narendra Modi told Putin in Uzbekistan that “today’s era is not an era of war.” The U.S. looks to cooperate on sanctions more closely with India, which so far has maintained a relatively neutral stance on Russia’s invasion of Ukraine, and has been increasing imports of Russian oil.
Japan has also continued to import Russian liquefied natural gas.
“They obviously have their own needs, but we don’t doubt their support” in opposing Russia, Fernandez said.
“If you wanted to look at a bright side of the tragedy,” it is how the solidarity between the U.S. and Japan “has really been solidified as a result of the invasion,” he said.
‘Smart’ decoupling of West and China is possible with right tools
It’s a bad idea to split the global economy when there is no need to do so
by Brad Glosserman
https://www.japantimes.co.jp/opinion/2022/08/02/commentary/world-commentary/china-u-s-cold-war-2/
There’s a lot of talk about decoupling the Chinese and Western economies.
The most ambitious version of that vision, that of two separate spheres of economic influence, is nonsense. There is no way to split the global economy, nor the need: Much economic integration is good for both sides and bifurcation serves only the most desperate, vicious and shortsighted.
Interdependence at the high end of the economy is another matter. Decoupling here is possible — and worked during the Cold War. But tools from that era aren’t fit for the purpose today. New mechanisms are already being discussed. Businesses should get ready.
The drive to decouple China from Western economies has two motivations: fear of reliance on China for key goods and materials and fear that Western technologies will strengthen an adversary. Because there was so little integration of the Western and Soviet economic blocs, the first concern almost never surfaced during the Cold War. Today, most modern supply chains run through China and the country controls many resources vital to modern — and future — technologies. This has spurred efforts in every major economy to reduce its dependence and find “friendlier” and more reliable sources of supply. (China has the same fear and has embraced the same policies, with even more determination.)
In contrast, the second objective has been a pillar of Western security policy for over half a century. Throughout the Cold War, the West used control regimes to deny the Soviets (and other enemies) access to technologies that could aid their military. They largely succeeded. After being involved in one of the most visible and embarrassing incidents — the 1987 Toshiba scandal — Japan has become a leader in promoting export controls.
A new study for the Georgetown Center for Security and Emerging Technology (CSET) explores one such U.S. effort: the denial of satellite technology to China. Authors Tim Hwang and Emily Weinstein concluded that this tech domain has “definitively decoupled,” with almost “no direct links” between the U.S. and China “thanks to export controls and limits on bilateral engagement with China counterparts.”
Their research shows that “decoupling is a viable strategy: Export controls can indeed play a powerful role in reshaping supply chains and limited rival access to emerging technology.” But, they add, such efforts are “imperfect and frequently act as a hindrance, rather than an absolute bar, to a rival’s technological progress.” It is “a narrow tool,” with “limited impact” and “limited scope,” but if “a temporary delay in the progress of a rival is valuable … the tactic offers an attractive option.”
There are important caveats. First, the success of a decoupling regime depends on the technology. The fewer the sellers, the more effective controls can be. If there are many ways to acquire goods, then U.S. efforts alone won’t succeed. Hwang and Weinstein note that the rise of alternative sources of satellite technology, Europe in particular, undercut the efficacy of U.S. export controls in this sector.
Second, decoupling can undermine U.S. competitiveness in technologies being controlled. Sales are reduced. The U.S. Department of Commerce estimated that U.S. companies lost between $988 million and $2 billion of foreign sales from 2009 to 2012 because of those restrictions. Those would help fund future R&D to sustain U.S. leadership in these fields.
Talent can be harder to acquire when U.S. restrictions prohibit collaboration with particular countries. Restrictions can keep U.S. researchers from joining international projects that don’t ban China. The loss of that opportunity could prompt young scientists to pick European rather than U.S. research programs.
Decoupling also denies the U.S. access to Chinese work in this field. Keeping tabs on the competition is much harder without insight into Chinese developments or breakthroughs.
Officials in Washington and like-minded capitals aren’t deterred. The devastating impact of sanctions imposed on Russia in the wake of its invasion of Ukraine — virtual decoupling — has policymakers enthusiastic about these initiatives. Testifying to the U.S. House and Senate last month, Alan Estevez, head of the Bureau of Industry and Security (BIS), the part of the Commerce Department that administers export controls, said that sanctions have resulted in an 88% drop (by value) of U.S. exports to Russia, while those of other countries have decreased by 60%. Russia’s economy ministry projects a 12.4% decline in gross domestic product this year.
This is increasingly the lens through which policymakers view intensifying competition with China. Western governments are determined to deny Beijing access to technologies that can advance its military capabilities. But old distinctions between civil and military are being erased — China’s signature program is called “military-civil fusion” — and the West sees new and different threats from Beijing, such as diversion of technology for human-rights abuses, economic coercion or merely displacing the West as the global leader in new technologies, with all the advantages that ensue.
Earlier this summer, U.S. Secretary of Commerce Gina Raimondo, Estevez’s boss, warned that a technological edge is essential to ensuring that Western values remain at the core of the global order. Export controls, she said, “are at the red-hot center of how we best protect our democracies.”
But existing regimes need to be updated. The four that exist — the Missile Technology Control Regime, the Australia Group, the Nuclear Suppliers Group and the Wassenaar Arrangement — focus on weapons, conventional or those of mass destruction and the items (commodities, software and technologies) necessary for their development, production or use. These aren’t designed to deal with the issues mentioned above — the threat posed by China’s dominance in key technologies; supply chain resilience; commercial technologies used to abuse human rights; and other military-civil fusion policies.
Like-minded governments are discussing a fifth export control regime, one that builds on the Russia experience. In several recent papers, Kevin Wolf, a former head of BIS, and Emily Weinstein, are beating this drum. While they applaud efforts such as the U.S.-EU Trade and Technology Council (TTC), they also note their geographical limits. No tech regime can succeed unless it includes the Asian powerhouses. As they wrote, “a fifth new regime among the techno-democracies, together with work on its creation, would combine and benefit from all the good thoughts and resources of our Pacific and European allies.”
Officials are listening. In addition to the TTC, technology controls are part of “the Quad,” the Australia-U.K.-U.S. trilateral security partnership and most discussions the U.S. has with its allies. Export controls were a key item at last week’s inaugural meeting of the U.S.-Japan Economic Consultative Committee and have been part of discussions for the Indo-Pacific Economic Framework. As Estevez explained, “Our work with the 37 other countries to implement the Russia controls helps provide a blueprint for advancing further. We have momentum on export controls that I will be working to carry forward as we build a new technology security architecture.”
Figuring out what to control is even more difficult than Hwang and Weinstein indicated. It’s hard to identify and define the appropriate technology. Businesses are loath to lose sales and resist restrictions. It is hard to make the case to restrict emerging technologies since their potential uses — and abuses — aren’t yet clear.
One option is to focus on areas that China has identified as chokepoints in its own analysis. Another CSET study lists 14 of “the most vexing” technological import dependencies according to Chinese researchers. Those are the most likely targets of any successful export controls regime. Western governments are likely already working to identify additional vulnerabilities.
Ultimately, however, defense is only half of any strategy for strategic competition. Just as vital is developing the capacity to innovate and diffuse those technologies throughout the economy. But by all indications, those efforts are accelerating as well. The competition heats up.