Tokyo Despite the Taiwan conflict, the US and China will continue to do business with each other for the foreseeable future, according to respected political adviser and head of the Eurasia Group, Ian Bremmer. Instead of a real decoupling, he expects a gradual and incomplete withdrawal by the Americans. More is not in the interests of the US economy, he told the Handelsblatt.
Companies in the USA are critical of decoupling and are exerting influence accordingly. There are many political issues on which the USA and China do not agree. “But the private sector, which is very powerful in the US and determines politics more than in other countries, is very committed to the Chinese market and wants to invest more,” reports Bremmer. In addition, there is no grand global coalition against China like there was against Russia – “and Biden knows that”.
From Bremmer’s point of view, a war over Taiwan is therefore “extremely unlikely”. From the Chinese point of view, Taiwan is the most important problem in relations with the USA. “Overall, I’m much less concerned about this topic than most analysts,” he said on the sidelines of the “GZero Summit” of the Eurasia Group, which he founded.
The background to the latest escalation is a visit by the Speaker of the US House of Representatives, Nancy Pelosi, to Taiwan at the beginning of August. The Chinese government then launched military maneuvers around the island.
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US President Joe Biden repeatedly warned that the US would defend Taiwan in the event of a Chinese attack. Also this month, a US Senate committee, with both Democrat and Republican votes, passed a draft Taiwan Policy Act that would significantly upgrade the status of the island claimed by China and allow for more arms sales.
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According to Bremmer, however, the effects on trade are likely to be limited: “My basic expectation is not complete decoupling, but gradual decoupling, which will not define the relationship between the USA and China.” In both countries, questions of national security would determine those fields which should be separated more.
The first endurance test of his thesis will be the G20 summit in Indonesia in November, at which a personal meeting between Biden and China’s head of state Xi Jinping is also planned. The bilateral meeting of foreign ministers last week went well, says Bremmer. For him, this is a good omen for the upcoming top-level talks: “I suspect that this meeting will help to balance and stabilize relations after the recent ‘storm in the teacup’ over Taiwan.”
After all, China has no interest in a further escalation either, says Bremmer. China needs the Taiwanese chip industry. In addition, the reactions to the Ukraine war have shown the leadership in Beijing how risky an invasion is. In Ukraine, not only Western governments are helping with weapons, but also technology companies. “That means China would have to fight US military engineering and technology companies in Taiwan,” Bremmer said, “and that’s a big deal.”
Companies should question China strategy
Bremmer sees a risk factor for the security situation in Washington in the short term. Individual high-ranking politicians such as Pelosi acted as “hobby foreign politicians”. She went through her visit to Taiwan against Biden’s concerns. In addition, there is the danger of a possible second term in office for Biden’s predecessor, Donald Trump.
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Bremmer fears that Trump could surround himself not with experts but with loyalists who would not oppose him if he were re-presidency. “In that case, it’s possible that US-China relations will collapse because of US political dysfunction,” he said.
According to the President of the Eurasia Group, the leadership in Beijing has no interest in a war.
(Photo: Bloomberg)
Bremmer advises companies to ask themselves “whether the business models that made them move their supply chains to China 20 or 30 years ago are still valid today and whether they will still be valid in five years.” Among other things, the question arises , the extent to which business is drawn into politics because of national security issues.
He sees important infrastructure, quantum computers and new mobile network technology as critical areas in cooperation with China. “But the bulk of the Chinese economy includes sectors and market access that European companies are very interested in, and that’s not going to change.”
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