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China and America: Coupling up

Politicians in the US and China warn of decoupling, but at a financial level the two countries are closer than ever. China needs US money and help to build its capital markets. US funds are snapping up mainland securities as they tap into the great investment opportunity of the 2020s. It’s a perfect match.


Many words will define the year 2020. Covid is one. So are facemask, quarantine, lockdown and, of course, Zoom.

Then there is ‘decoupling’, a neologism that refers to the fault line perceived by many to be growing between the US and China.

For years, the two powers tolerated one other. It was an uneasy but workable pact that benefited both sides. Then came Donald Trump. The 45th US president bashed Beijing from day one. He carped about China running a trade surplus while maintaining tariffs on US goods.

But things really came to a head this year. Coronavirus hit the US economy hard and put Trump on the back foot. Struggling to control the narrative, he lashed out at the source of the pandemic.

His administration slapped sanctions on Huawei, cutting off the firm’s access to advanced computer chips, and targeted government officials in Hong Kong, in effect cutting them out of the US financial system.

In August, the State Department told US colleges to divest Chinese stocks held by their endowments. In October, it proposed adding Ant Group to a trade blacklist just as the technology firm prepared to go public in Hong Kong and Shanghai.


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