Analysis
Preparing responsibly for the worst case-scenario
Full economic decoupling from China is not possible or desirable today, but it may become necessary in some break-glass scenarios—especially if China moves violently against Taiwan.
Today, the United States and its allies have no contingency plan. And China knows it.
This project, in collaboration with Hugo Bromley of the University of Cambridge, aims to tighten allied coordination and planning for crisis scenarios, based on our nations’ shared interests and values.
Washington needs a plan to decouple from China starting on Day One of a Taiwan crisis, both as a contingency plan and as a part of integrated deterrence.
However, trying to force a hard decoupling through sanctions would not serve US interests. China would likely prove resilient.
Instead, Washington should publicly prepare a plan to trigger “avalanche decoupling” on Day One as part of a wider program of economic recovery and leadership. Supply chains would stay as open as possible in the short term, but unilateral US actions would create inexorable momentum toward full decoupling over time.
Avalanche decoupling would harness market forces and incentivize third countries to cooperate, including by helping to secure US borders against China’s mislabeled products.
Our July 2024 report is the first in a series of publications about a better strategy of economic statecraft to compete with China in today’s complex and diverse world. These issues are too important to split along partisan lines. We need a new approach to allied economic statecraft: an affirmative vision for the global economy that we can rally around in peacetime and crisis.
In our work, we draw inspiration from history, economic analysis, and Chinese-language sources.
Read the full report here, or check out Andrew Nathan’s review in Foreign Affairs or or own shorter essays in Foreign Affairs and The New York Times.
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