For U.S. politicians and the public, shortages of N95 masks and other key medical equipment at the beginning of the coronavirus crisis highlighted just how dependent the United States had become on production in China. The Trump administration’s aggressive policy toward China was broadly popular, despite potential negative side effects. In the first 10 months of 2020 the exact phrase “decouple from China” or “decoupling from China” appeared in three times as many articles as in the previous three years combined.
The Strategic Challenges of Decoupling
Most business executives who have put time, effort, and investment into developing a presence in China resist the notion of decoupling. With the Biden administration likely to take a less confrontational approach to China than Donald Trump did, CEOs might be tempted to hope that the issue will blow over. But as the authors point out, China has been following a long-term strategy of reducing its dependence on foreign technology and capabilities for more than 15 years and has projected that strategy forward another 15 years. Decoupling is here to stay. In this article they explain four strategies for foreign companies in China, depending on whether they are below-the-radar players, upstream players, market players, or dual players.
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