US and China, though still entwined, are likely to cut their ties further in 2024, analysts say
- DHL Global Connectedness Report sees shift as ‘less a decoupling and more a reduction of what had previously been an unusually high level of integration’
- Geopolitical tensions and the US elections this year will probably hasten the scaling back of engagement between the two nations, author concludes
China and the US are still more connected than almost any other pair of countries in the world in 2023 despite diminishing ties, but that scaling-down may accelerate this year amid US elections and regional conflicts, analysts have concluded.
While the world’s two largest economies have seen widespread drops in direct flows in terms of trade, capital, information and people in the past years, such shifts represent “less a decoupling and more a reduction of what had previously been an unusually high level of integration”, according to the DHL Global Connectedness Report 2024, which was released on Wednesday.
“The US and China entered the current period of tensions with an unusually high level of ties between them,” said Steven Altman, an author of the report and the director of the DHL Initiative on Globalisation at New York University.
China was dethroned as the top source of US imports in 2023, for the first time in 17 years, after being outpaced by Mexico, according to US Census Bureau data.
“The share of US imports coming from China now matches the share of the rest of the world’s imports coming from China,” Altman said, adding that “the data on direct US-China flows understate how connected these economies remain because of substantial increases in flows taking place via third countries”.
