Every country has in itself a little bit of others as all share the same time and space
The concept of decoupling was first proposed by Dependency Theory that was popular in the 1960s. The theory proposed that the developed countries are the source of poverty in developing countries because the developing countries are heavily dependent on the developed ones’ capital, markets and technology. To shake off such an exploitative relationship, developing countries had to decouple from developed states. This has proved to be unfeasible. The idea of decoupling no longer has many proponents now.
Entering the 21st century, thanks to the excellent performance of those emerging economies, a decoupling trend has formed, separating their economic growth from the developed countries. It seemed to signal that the situation when developing countries sneeze, emerging markets get sick, had come to an end.
However, the collapse of Lehman Brothers in 2008 had a detrimental effect on the trend. It led to the financial crisis and that caused a global economic slowdown in both developed and emerging economies, showing their growth rates remained synchronous.
Since 2017, the United States has implemented a comprehensive containment policy against China in trade, science and technology, and multilateral diplomacy, seeking to leverage its advantages to cut off or reduce ties with China. It has been viewed as a decoupling by academics and the media. But that differs from the decoupling of the Dependency Theory, which defines it as separate growth trends between emerging and developing economies.
An article published in Financial Times on June 8, titled Pandemic Starts Process of EMs Decoupling from Each Other, put forward another definition of decoupling. It argued that: “For years we have been talking of the decoupling of emerging markets from developed markets. COVID-19 is showing us that we may have got the argument wrong. Before decoupling from developed markets, emerging countries first need to decouple from each other.”
The article said that emerging markets have adopted different ways to overcome the challenge of the novel coronavirus, determining their market performance in the post-pandemic era. Besides, critical economic vulnerabilities have been exposed in terms of credit health, fiscal budgets and the global demand of goods and services, and they have looked at various ways to keep their economic activities going. The differences in their responses and the effects are the reasons for the decoupling. Instead of emerging markets reducing their cooperation, the article indicates that diverse approaches against adverse external conditions have brought them different development prospects. The article seems to predict that the pandemic will accelerate the divergence between emerging economies.
Besides the challenges that China faces, the Financial Times article recognized the largest emerging economy’s efficient response to the novel coronavirus. It said China is arguably dealing more effectively with the pandemic and now further ahead on the path of social and economic normalization. While some emerging markets, such as Brazil, Mexico and India, are likely to suffer the pandemic’s consequences for a long time.
In the age of globalization, the world economic development has shown that “decoupling” is a pseudo-proposition.
China has grown to be the world’s second-largest economy in just a few decades. It is acknowledged by the international community that it is expected to grow to be the largest. However, a problem emerges, whether the US is willing to accept China’s rise. The bid by the world’s dominant economic power to suppress China’s rise has shown results. Although the strategy can increase the difficulty of China’s growth to a certain extent, it also harms the interests of the US at the same time. It is obvious that cooperation and mutual benefits are the law of development in international relations along with the deepening globalization.
The rapid development of China’s economy did widen the gap among emerging countries, leading to significant changes in global economic pattern. However, due to the particular national conditions, such as its large population, the state will remain a developing country for the foreseeable future.
President Xi Jinping once said, it is a world where countries are linked with and dependent on one another at a level never seen before. Mankind, by living in the same global village within the same time and space where history and reality meet, has increasingly emerged as a community of shared destiny in which everyone has in himself a little bit of others.
His words imply the problems of decoupling and reveal China’s determination to cooperate with all countries with mutual benefits, including the US.
Unlike the concept of Dependency Theory and the economic phenomenon among different economies, the US’ intention to delink itself from China will have an underestimated negative impact on the world pattern and even hinder the scientific and technological progress in human society.
The author is a distinguished professor at Shanghai University. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.