ISLAMABAD, May 6 (Xinhua) — U.S. Treasury Secretary Janet Yellen’s recent layout of the U.S. “geo-economics” strategy has historical roots, which advocates that the United States should achieve its geo-political dominance through military as well as economic means, a Pakistani economist told Xinhua in a recent interview.
When the United States had become a global hegemon decades ago, “it is argued that America should pursue its geo-political ends not just militarily but by primarily employing international economic relations, not in cooperative pursuit of mutual advantage but as an adversarial, winner-take-all war,” said Arshad Zaman, a former chief economist at the Ministry of Planning in Pakistan. In a recent speech, Yellen — despite calling for “constructive” engagement between the world’s two largest economies — said national security is “of paramount importance” in the U.S. relationship with China.
“China’s economic growth need not be incompatible with U.S. economic leadership,” she said. Noting that the U.S. treasury secretary’s remarks laid out in public the “geo-economics” strategy of the current administration, Zaman said that U.S. trade restrictions have already exerted a significant impact on U.S.-China trade relations, on the two economies and on global economic recovery. Zaman, who is also a former senior economist with the World Bank, said that this U.S.-imposed trade war did not only raise import costs for American businesses and lowered sales for Chinese exporters, but had also disrupted global supply chains, which led to higher costs for businesses and consumers around the world.
Other measures including restrictions on Chinese investment in the United States and the blacklisting of Chinese companies have made it harder for Chinese companies to do business in the United States, and have eventually created uncertainty for American businesses that have relationships with them, he added. Regarding the concerns that Washington’s bullying nature would push it towards decoupling with Beijing, he noted that the United States has sought to restrict China’s access to advanced technologies like semiconductors and artificial intelligence, pushing for decoupling in some sectors.
In the short term, this would likely lead to higher costs for businesses and consumers, reduced efficiency, and slower growth, Zaman said. In the long term, Zaman added, decoupling could lead to the fragmentation of supply chains and standards in the global economy, potentially reducing the benefits of globalization and cooperation. “It is important, therefore, for the U.S. to find ways to cooperate and manage its differences with China, to avoid a further escalation of tensions and potential economic disruption,” said the economist.