Segal Stephanie, Reynolds Matthew Roberts Brooke (ed.) Degrees of Separation. A Targeted Approach to U.S.-China Decoupling

Center for Strategic and International Studies, 2021. — 74 p.The CSIS Economics Program launched Degrees of Separation last year to establish clearer objectives for U.S. engagement with China and to assess whether disengagement from specif i c economic activities can help in meeting such objectives.
T h e project’s interim report, published in February 2021, provides a historical frame for U.S.-China engagement since the normalization of relations in the 1970s.2 It notes that support for closer ties, economic and otherwise, in the bilateral relationship was grounded in the belief that such ties would advance U.S. objectives. Th e emergence of the United States as the world’s lone superpower, along with reform and liberalization in China through the early part of this century, appeared to validate this approach, even as technology leakage and dislocations associated with China’s increasing integration with the global economy were slow to be appreciated. While U.S. and Chinese political and security interests did not generally align during this period, it was not until China achieved the economic scale and technological and military capacity to visibly challenge the current system that a revised approach to China—one involving separation or decoupling of U.S. and Chinese activities—gained traction, at least among some analysts and as relates to certain activities, as necessary for achieving U.S. objectives.
As recognized in the interim report, restrictions on certain activities are warranted, but a wholesale decoupling is neither feasible nor advantageous to the United States. Where to draw that line is a major challenge for policymakers seeking to balance the benef i ts and risks of engagement with a strategic competitor Degrees of Separation aims to bring a common analytical approach to these judgments, starting from a shared risk assessment and grounded in the achievement of U.S. objectives.
Th is second and fi nal Degrees of Separation report is organized as follows: Section 1 presents the elements of a framework built around U.S. objectives that can be used to assess specific activities as candidates for targeted decoupling. Section 2 brief l y examines the range of views on Chinese motivations, recognizing the role such views play in the calibration of U.S. policy toward China.
Section 3 articulates U.S. objectives in six priority areas relevant to U.S.-China relations: (1) geostrategy; (2) economics; (3) values-based; (4) global rules and norms; (5) global public goods; and (6) technology and innovation. Section 4 tests the framework looking at three areas at the heart of U.S.-China competition: artif i cial intelligence (AI); biotechnology; and capital markets integration and cross-border portfolio flows. Informed by the fi ndings from these case studies, Section 5 summarizes key fi ndings and draws lessons that can help manage both the U.S.-China bilateral relationship and the U.S. relationship with allies and partners going forward.