China’s Plan to Overcome the Decoupling Crisis

China is facing massive trade embargo from the U.S and its allied nations. The trade isolation is degrading the Chinese economy rapidly. This has stimulated the country to plot effective paths that shall reduce the aftereffects of this isolation. Though several Chinese delegates along with an army of economists have warned Trump government about the effects of the crisis, the present U.S. government is adamant in removing the embargo. Theoretically, the decoupling will lead to freezing of foreign trades, ripping of supply chains, and demolition of economic bridges between the countries. It is noticeable that it took almost 4 decades to build these relationships.

Why U.S. is Imposing Trade Embargo on China?

The trade conflict began in 2018 when President Trump asked the Chinese Government to change its trade practices. These practices are unethical in U.S. government’s perspective. According to the spokesperson for the U.S. government, Chinese trade practices involve, forceful transfer of U.S. technology and theft of intellectual properties. When Chinese Prime Minister Xi Jinping refused to acknowledge these practices, the U.S. government sealed the fate of Chinese trade by isolating the country.

How is China Willing to Overcome This Issue?

The Chinese government is investing a massive amount in research and development. These researches shall allow the players being new products in the market. The country is also investing in a major amount of money in several startups. These strategies shall help China to strengthen its weakening economy and lift it to its full glory. As a result of this crisis, the technology sector shall experience maximum drawbacks. This is because of the loss of business and major clients that are operating in U.S. Moreover, as a result of this embargo, the cottage industry in China is also projected to witness a substantial downfall. Hence, the country is aggressively investing in the improvements and developments of Chinese cottage industry.

 

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