Chimerica - can it actually decouple and go it separate ways?

[Juggy777]

If you’re not aware then Chimerica in economic terms means that China is the production house, and America is a Tech headquarter and they both are operating together for mutual benefits. However lately both the Presidential candidates have assured to decouple, and produce all goods in America. Further we all would remember that Apple has time and time said that producing in America would not be possible, but if the winning candidate walks the talk then this decouple could have major ramifications for the US companies who produce their goods in China. What are your thoughts on this, do you believe that a decouple between these two global power houses is actually possible?.

Chimerica” – with China as the global “workshop” and the US as the tech “headquarters” of the world. The old hope that this economic interdependence would prevent political conflict has been shattered. Instead, deep economic integration has increased the stakes: the core of the world economy could fall apart.

“Decoupling” has become the new buzzword to describe the possibility of an economic break-up between the US and China. Trump, too, has recently added it to his rhetorical arsenal. Decoupling makes it sound as if the disintegration of the world’s two largest economies could be done in one simple step – like disconnecting the coupling between two wagons of a train. This couldn’t be further from the truth.

In 2012, Barack Obama asked Steve Jobs whether the iPhone could be produced in the US. Jobs answered with a plain no, and the difficulties likely remain in place today. Chinese government institutions, local business partners and multinational corporations have built supply chains in China since the late 1980s. Production sites are sustained by gigantic infrastructure developments, and draw from China’s roughly 300 million migrant workers, many of whom live in dormitories at the edge of the assembly line.

Source:

https://www.theguardian.com/commentisfree/2020/sep/11/us-china-global-economy-donald-trump

[Ayiranorea]

Both the countries were mutually benefited, and the same will continue even when there is a new president. As for concerned little political game and little business opposition were part of the plan. Maybe to the outer world it looks like there is zero business between them. Internally there isn't no big change in the business volume between the two countries. Now everything is being related to the election with new terms 🙂

[mersal]

Not really possible in 2020 because China has better infrastructure and cheap labor costs than any other country but in future this will be moved gradually to other countries.Even Apple shown interest of moving their part of manufacturing plant to China's neighbouring country which is India has the capability of producing goods for cheaper prices.

Apple plans to move 10% of its global manufacturing to India in 5 yrs

[BIT-BENDER]

As a company -a big company at that-, one of your targets/agenda should be readiness/adaptation to change, any US company in China, should before this time know the worse can happen between this country that same for Chinese companies in the US, so on ground plans/strategies for the worse should have been in place. Big companies think critically.

[Lucius]

Apple can only leave China if ordered to do so by the Chinese or if the decision is made at the political level in the United States. But in that case, the latest Iphone will no longer cost around $1000, but its price will at best increase by at least 50%. Although, according to all research, the price of labor in China is twice lower than in the USA - what makes China the most favorable destination is not exactly labor costs, but "skill required in tooling engineering" + logistics provided by Chinese ports (7 from 10 biggest are located in China).

The fact is that the US needs China, just as China needs the USA to generate millions of jobs for the local population. Yet what official US policy does to Chinese companies globally really raises the question of who depends more on whom - the Chinese obviously have some kind of plan because for the most part they still only receive blows, not retaliate.

The Cost of Making an iPhone

[Upgrade00]

Tension between both nations has been rising for a while now.
• The U.S issued a ban on Chinese apps
• In May, Trump issued a ban on Chinese grad students/researchers with military affiliation, this went into effect recently as Visas of 1000 Chinese students were revoked by the U.S.
• I also found reports of the plans to block key exports from China
All this actions were referred to as protective measures against the security risk China poses and they have all been strongly condemned by the Chinese government.
The Chinese government has also had its fair share of restrictions to present foreign interference, part of which is the great firewall.

At this rate, a decouple is possible, but for it to be sustainable both nations would have build up their systems to function independently or find another market for their products.

[int03h]

Segregation is essential because China is not simply a manufacturing hub anymore, but is taking steps to become a stronger hub for technology by stealing technological values ​​from the US. They grow faster and compete more with Apple. What products Apple and Samsung corporations can make, Chinese companies can do the same.
But it must be recognized that China has the logistics chain as well as the skilled and cheap labor force to be able to produce technology goods. Corporations like the iPhone, Samsung ... have made a lot of money from making equipment in China.
Under pressure from the US President, they are forced to find ways to comply with the policies outlined by Donal Trump. But what will the next election look like to replace Donal Trump?
Will policy continue to change as the former president did or will relations with China continue?
I'm waiting for what happens next.

[abhiseshakana]

This issue is not about Chimerica alone, but between the nationalist and globalist camps, represented by America and China. We take the example of Apple which produces in China, under Tim Cook who is an expert in cutting costs through its global supply chain, Apple has greater competitiveness for penetration into the Asian market, even though the technique and technology are American owned. This kind of practice, according to Apple, is business as usual, but for Trump it means a flight of capital. Globalists find it difficult to break away from China, because they are already stuck with China's dragon tail strategy, making it difficult to move their production from China.

The globalists intend to implement one system of government and one currency, they are against the domination of several currencies in the economy. In addition, the government of a country is considered incompetent in dealing with relations between countries, causing war, famine and environmental damage. The enemies of the globalists are the nationalists and Trump is a nationalist who is now known as the number one public enemy in the world. The trade war that was enacted in China was of course not in Apple's favor, so the best option would be to move assembly to another country.

[Darker45]

I believe Barack Obama exerted much effort to try to convince American companies to go back to America and try to revive the respected "Proudly Made in the U.S.A." If I'm not mistaken, he was able to convince a few. However, it was generally a failure. The rest remained in China.

The point is to provide these companies the very reason/s that made them decide to transfer to China in the first place. After all, they are into pure business. Nationalism and patriotism are two concepts which might not be found in a business dictionary. The main goal is to make profit, the bigger the better.

However, it seems the land of the free cannot provide them dirt cheap labor, for one. The raw materials are also produced in China. Electricity is cheaper in China. And so on. Therefore, I don't think this "decoupling" is an easy thing to do. Interdependence between these two countries cannot be cut easily.

[sabbir2world]

Donald Trump is aggressive to decouple from China rather than XI Jinping. But both of them want control over everything. That's why the world economy is upset right now. What Trump fails to understand that without China or Chinese electric support the overall cost of production will increase substantially. The real question is if Trump loses this year... Will this situation change?

[worldofcoins]

The aggressive Donald Trump was during his speech saying he knows where Covid-19 was made in Wuhan then he's serious about decoupling.
Anyways US has already faced enough economical damage and Trump wants to remove weak roots for a new US.

[Oceat]

Donald Trump is aggressive to decouple from China rather than XI Jinping. But both of them want control over everything. That's why the world economy is upset right now. What Trump fails to understand that without China or Chinese electric support the overall cost of production will increase substantially. The real question is if Trump loses this year... Will this situation change?

Nope, that is not possible since the US have a law already restricting a person to be running twice as a president.
https://en.wikipedia.org/wiki/Twenty-second_Amendment_to_the_United_States_Constitution

Somehow I am hoping that after his term ends someone would do something to stop the decoupling since they will going to ruin both of their economy if they consider the decoupling. Both countries needed each other for the sake of economy growth especially this time where there's a pandemic that causes a lot of damage not even in the economy but also to the people's health.

[hugeblack]

We are at the stage of negotiations the two parties are raising the ceiling of ambitions and hopes for greater gains such as increasing jobs for Americans or increasing import duties, but the end result will not be the division of the world into camps, but rather than negotiations.

[Salauddin1994]

I don’t think it can be done in a different way both china and the united states are looking for benefits to improve their countries china has adopted its own strategy through co-operation coercion and secrecy china's dictatorial intervention exists at all levels. At the same time their real purpose is to keep secret the combined efforts of the communist party in government industry education and the military are making this stronger and more dangerous. The goal of the chinese communist party is the complete opposite of american ideology and policy but donald trump does not support it.

[stompix]

Apple can only leave China if ordered to do so by the Chinese or if the decision is made at the political level in the United States. But in that case, the latest Iphone will no longer cost around $1000, but its price will at best increase by at least 50%. Although, according to all research, the price of labor in China is twice lower than in the USA ...

The fact is that the US needs China, just as China needs the USA to generate millions of jobs for the local population.

Well, US companies could replace China with Mexico, I doubt China can replace US consumers with ...?  
China is in a difficult position, it needs to raise its population wages but at the same times keep labor costs low, the US only needs a way to make US companies move in another country, not really easy as pie but far easier than the Chinese dilemma.

Normally when two superpowers fight each other, the third would  try gain advantages from both, but instead of doing that we in Europe are busy with our own infighting, I feel like we're missing our biggest opportunity right now