Half a year ago, the notion of dividing the United States and China into separate economic spheres seemed highly improbable to U.S. multinational executives based in China.
According to a survey by AmCham China, AmCham Shanghai and PwC China, a new survey of executives at American corporations with long history on the China market finds 44% responding that U.S.-China economic "decoupling" is "impossible."
The survey is taking place in the face of increasing calls to bring back to the U.S. the manufacture of essential medical goods - safety gear, pharmaceuticals, devices like ventilators.
Many items in short supply - masks, safety gowns, pharmaceutical raw materials such as penicillin and ibuprofen - mainly come from the same country: China.
"One of the public's lessons is that all roads return to China in many ways," said Benjamin Shobert, Senior Associate for International Health at the National Bureau of Asian Research.
"In view of the political realities, the realities of public health, we are now asking ourselves how comfortable we are to be dependent on China for this manufacturing infrastructure?"
Chinese acquisitions in key industries including oil, semiconductors and social media have been blocked by the U.S. government.
On the Chinese side, the Made in China 2025 plan for Beijing is explicitly intended to reduce the nation's dependence on foreign technology.
In the United States, the Chinese government has curtailed financial investment by the private sector.
"China's government, nervous of capital outflows as a sign of financial risk and instability, [closed] its own door on its own companies going abroad," said Daniel Rosen, Rhodium Group's founding consultancy partner.
In light of the pandemic, Rosen expects more calls to bring home manufacturing to the United States.
But because of its higher labor costs, that could be expensive.
More than 30 medical export bans have been imposed across the globe since March.
"With masks, you've probably heard, 3M is doing its best to ramp up production as quickly as possible," Douglas Irwin, the Dartmouth College economic historian, said.
So if the U.S. says no masks for Canada, the Canadians would be able to respond and say no fibers.
Many states have started to relax the restrictions that had been put in place to slow COVID-19 spread.
While social-distancing measures still hold virtually everywhere in the country, more than half of states have begun phasing out residence-at-home orders.
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Read the original article "U.S.-China economic 'decoupling' idea is gaining momentum - Marketplace" at https://www.marketplace.org/2020/04/17/us-china-decoupling-gains-steam-amid-medical-supply-shortage/