Paul Gewirtz is a Professor of Constitutional Law, Yale Law School, Director, Paul Tsai China Center, Yale Law School, and Nonresident Senior Fellow – Foreign Policy, John L. Thornton China Center
Ever since the Group of Seven (G-7) countries have recently agreed on a central part of their economic approach to China – “de-risking not decoupling”, I have been searching the internet for opinions to understand what it really mean. My search yielded answers and opinions from probably all the major news sources around the world, nevertheless, the real meaning of de-risking remains elusive to most. Perhaps, the European Union which coined this catchphrase purposely let it remain ambiguous and its meaning uncertain.
A search on the internet have netted the following articles and opinions on the subject:
- New York Times: How ‘Decoupling’ From China Became ‘De-risking’POtter
- The EConomic Times: The semantics behind how the world deals with China
- Hindu: Why is the U.S. shifting its approach to China from decoupling to de-risking?
- Firstpost: G7 to focus on ‘de-risking’ from China: How is it different from decoupling?
- South China Morning Post: Western ‘de-risking’ from China without decoupling makes little sense and only aggravates tensions
- CNBC: ‘We are not decoupling’: G-7 leaders agree on approach to ‘de-risk’ from China
- The Straits Times: De-risking, taken too far, will lead to fragmented and decoupled world economy
- And many other sources…….
According to Paul Gewirtz’s opinion:
“In reality, the word “de-risking” is extremely ambiguous and its meaning uncertain. The word itself tells us very little about China policy. Its scope all depends on how the word is interpreted. Very likely, different countries will interpret and apply “de-risking” differently, creating divergence and not consensus — in some countries producing a modest scope of economic separation, in some potentially a policy similar to “de-coupling.”“
“The second major uncertainty is what counts as a relevant risk. Even if you define de-risking as reducing rather than eliminating risk, the potential scope of de-risking and the degree of economic separation from China depends on what problems are treated as relevant risks.” In addition, presidents have historically overused their authority to protect “national security.” Beyond “national security,” many other problems involving China can be included in a de-risking policy — human rights, for example. De-risking is also certain to address a variety of economic risks China poses.
The third major uncertainty about de-risking is how a particular risk is evaluated and balanced against a country’s other national interests in deciding whether action should be taken against China and what that action should be.
Until actions replace words, we won’t know what the new “de-risking” policy is. But we can reasonably predict there will, in fact, be sharply divergent “de-risking” policies of different countries — not the consensus we seem to have now.