Experts say decoupling from China unrealistic
© Provided by Xinhua "The world has become more dependent on China both as a supplier and a consumer."BEIJING, Oct. 4 (Xinhua) -- Given China's economic resilience and pivotal position in the global economy and supply chains, the "dec
"The world has become more dependent on China both as a supplier and a consumer."
BEIJING, Oct. 4 (Xinhua) -- Given China's economic resilience and pivotal position in the global economy and supply chains, the "decoupling from China" rhetoric is not only unrealistic, but also short-sighted, experts have said.
As the world's second-largest economy, China plays a significant role in the global supply chains and will be crucial to the world's economic recovery, said Wichai Kinchong Choi, senior vice president of Kasikornbank, a leading Thai bank.
China's dynamic industrial eco-system, sound infrastructure, transparent business environment and huge domestic market all make it attractive to foreign investment, Choi said.
Decoupling or isolating countries or regions runs counter to globalization, Lawrence Loh, director of the Center for Governance and Sustainability at the National University of Singapore, told Xinhua.
"We should remain steadfast in the economic rationale of globalization," Loh said, noting that globalization helps promote the mobility of resources and outputs, bringing in efficiency gains for countries.
Noting that the trend of globalization is irreversible, Koh King Kee, president of Center for New Inclusive Asia, a non-governmental Malaysian think tank, said that open, inclusive, and win-win cooperation remains the way to move forward.
According to Koh, in the last decade, China's contribution to global economic growth stayed at about 30 percent. It is the world's largest goods trading nation, and one of the major trading partners of more than 120 countries and regions.
"The world has become more dependent on China both as a supplier and a consumer," he said, adding that China has been advocating multilateralism and promoting open, inclusive, and win-win cooperation through regional cooperation platforms such as the ASEAN-China Free Trade Area and the Regional Comprehensive Economic Partnership.
China's Foreign Direct Investment (FDI) inflow, in actual use, increased 17.4 percent year on year to 723.31 billion yuan in the first six months of this year. In U.S. dollar terms, the inflow went up 21.8 percent from a year ago to 112.35 billion dollars. In the second quarter, 91 percent of foreign-invested companies maintained or expanded their operations in China.
Globalization without China is not globalization and "decoupling from China" is completely empty talk, said Yuki Izumikawa, an official of the Japanese Association for the Promotion of International Trade.
Ronnie Lins, director of the China-Brazil Center for Research and Business, has compared "decoupling from China" to the removal of the engine and wheels from a vehicle.
The experts said it takes years for companies to build a complete supply chain, and a reckless change in any link along the supply chain would be uneconomical or even unrealistic.
"Those banging on about decoupling from China are clinging to the Cold War mentality, and they are just having a pipe dream," said Choi with Kasikornbank.
The world is still grappling with COVID-19 impacts, while emerging challenges such as rising inflation and energy prices are posing new risks to global economic growth, Choi said, adding that the Chinese economy, with great potential and resilience, will help drive global economic recovery and growth in the coming years.