From Chimerica to Decoupling: US-China Trade War and Failed Neoliberalism

• In Event: IPE Theory in Transition

Abstract

The 2018-9 US-China trade war put an end to this round of globalization and began a real decoupling of economic ties that the largest and the second largest economy had developed in the past four decades. This process will have a real and painful effect for the rest of the world to readjust and adapt and global economy will be restructured as a result. This paper focuses on current developments of US and China’s competition through trade, investment, high technology sectors and regional free trade agreements negotiations. It will draw extensively from the author’s field research in D.C., Beijing, Tokyo and in Southeast Asia. This paper will address two main research questions. First, how much decoupling is actually possible? What are the effective ways for other countries that are currently deeply webbed in this global production network to build greater resilience? Second, why does the most promising IPE theory of neoliberal institutionalism fail to predict the intensifying political tensions between two economically interdependent countries? In what ways and to what extent a new theory can be developed to better explain the mismatch between a globalized technology, trade and capital and emerging ideologically-divided two trading blocs?

Author

• Wei Liang, Middlebury Institute of International Studies