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The Dangers of Decoupling

With Sino-American relations increasingly coming to resemble the geopolitical dynamics of the original Cold War, the world is heading toward a fraught new equilibrium. While some in the West long for a new "Sputnik moment" to motivate investments and reform, they should be careful what they wish for.

BOSTON – The Chinese government’s crackdown on Alibaba last year, and on the ride-hailing company Didi this month, has generated fevered speculation about the future of that country’s tech industry. Some view the recent Chinese regulatory interventions as part of a justifiable trend paralleling US authorities’ own intensifying scrutiny of Big Tech. Others see it as a play for control of data that might otherwise be exploited by Western countries. And still others, more plausibly, see it as a shot across the bow to remind big Chinese companies that the Communist Party of China is still in charge.

But, most consequentially, the Chinese government’s actions are part of a broader effort to decouple China from the United States – a development that could have grave global implications. Despite steady deterioration in Sino-American economic and strategic relations, few thought the rivalry would turn into a Cold War-style geopolitical confrontation. For a time, the US was overly dependent on China, and the two economies were too closely intertwined. Now, we may be heading toward a fundamentally different equilibrium.

Three interrelated dynamics defined the Cold War. The first, and perhaps most important, was ideological rivalry. The US-led West and the Soviet Union had different visions of how the world should be organized, and each tried to propagate its vision, sometimes by nefarious means. There was also a military dimension, illustrated most vividly by a nuclear-arms race. And both blocs were eager to secure the lead in scientific, technological, and economic progress, because they recognized that this was critical to prevailing ideologically and militarily.

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