US-China Decoupling Could Offer Opportunities for Other Nations
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US-China Decoupling Could Offer Opportunities for Other Nations
- A recent Chinese study suggests that a complete economic decoupling between the United States and China could lead to increased economic welfare for some other countries, particularly in Southeast Asia.
- Published on September 12, 2026, in the *South China Journal of Economics*, the study, co-authored by researchers from the Guangzhou Geological Survey Institute and the Bay Area International Business School at Beijing Normal University, used a quantitative trade model to simulate various decoupling scenarios.
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A recent Chinese research study has indicated that a full economic separation between the United States and China, while detrimental to both superpowers, might unexpectedly create economic benefits for many other nations. The study, published on September 12, 2026, in the peer-reviewed *South China Journal of Economics*, utilized a quantitative trade model to analyze the potential macroeconomic fallout from aggressive trade policies.
Researchers from the Guangzhou Geological Survey Institute and the Bay Area International Business School at Beijing Normal University found that a complete severing of trade relations between the world’s two largest economies could result in an increase in overall economic welfare for several countries, especially those in Southeast Asia. These favorable changes are attributed to these countries partially taking over trade and production activities previously conducted through US-China cooperation during a global supply chain restructuring.
However, the study includes a crucial caveat: any spillover benefits would be temporary and fragile. If these beneficiary economies were to subsequently cut their own economic ties with China, their initial gains would quickly transform into losses. Vietnam, with its relatively low labor costs and expanding manufacturing base, was projected to benefit significantly from such a decoupling. Mexico’s potential gains were linked to its geographical proximity to the United States and its integration into the US-Mexico-Canada Agreement (USMCA), enabling it to efficiently absorb industrial activities related to near-shoring or reshoring of North American supply chains.
Broader research on US-China decoupling generally suggests that a complete separation would be costly for both nations and destabilize global markets. In 2024, for example, the U.S. exported $143.5 billion in goods to China and imported approximately $462 billion, highlighting their deep economic interdependence. While some argue for reducing reliance on China in critical sectors like semiconductors due to national security concerns, full economic separation would likely disrupt supply chains and increase production costs.