The Economic Consequences of a new Cold War

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In his latest tour to Europe this May, China’s minister of foreign affairs Qin Gang was on a mission. He had a clear aim: to prevent Europe joining the US in its endeavour to limit China’s access to advanced technology. He called on his German counterpart to “stick to the right path, jointly oppose the new Cold War, and decoupling economies or severing supply chains.” He faces an uphill struggle.European Commission President Ursula von der Leyen, in a hawkish speech on April 20, had assured China that the EU did not seek to decouple from China, but that it wants to “de-risk” the relationship. What that means is set to become clear in the coming weeks, when the EU is to present a list of goods and technologies that are too risky to hand to China.Thanks for reading Bert’s Newsletter! Subscribe for free to receive new posts and support my work.US Secretary Yellen had struck a similar tone in a speech at Johns Hopkins University. She said that the first principal objective of the US economic approach to China is to secure national interests. She added that the US is also seeking a healthy economic relationship with a China that “plays by the rules,” and continued to seek cooperation on global issues such as climate change.US National Security Advisor Jake Sullivan sang from the same hymnbook as Yellen a few days later at the Brookings Institute. He spoke of restrictions on a limited slice of technology, of “small yards with high fences.” Sullivan’s tone had mellowed from that of a speech last September ahead of the announcement of US export restrictions on semiconductors to Chi…