It strikes me that China, with over 17% of its GDP from exports (compared to about 12 for America) and an economy reeling from the Wuhan Flu, can hardly afford to block important exports to America.
The Chinese Communist Party (CCP) should fear we will decouple even faster by blocking consumer goods from China if China blocks critical exports. China needs economic activity to bolster the CCP control of China in the aftermath of the Wuhan Flu and the mistrust the party's response has generated among their people.
Check this out:
To be sure, President Xi Jinping has his plate full, says Vladimir Signorelli, head of Bretton Woods Research, a macro investing research firm out of New Jersey. “Repairing China’s global trust may come at a price,” he says. “We expect the Chinese to become more willing to concede in trade negotiations with the U.S. going forward because it’s all about volume and market share. They don’t want to lose anymore market share in the supply chain then they have to because of this disaster.”
Even this author who notes that exports are a smaller portion of China's economy thinks China is under tremendous pressure that could break their system:
Faced with rising unrest fueled by economic stagnation, the party would have to devote substantial resources to stability, largely at the expense of other priorities. Strict social control would also likely alienate some elites, such as private entrepreneurs and high-profile academics and writers. Escalating repression could generate greater resistance in China’s periphery—Tibet, Xinjiang, and Hong Kong—and elicit international criticism, especially from the European countries that China needs to court. ...
The events of the past few months have shown that CCP rule is far more brittle than many believed. This bolsters the case for a U.S. strategy of sustained pressure to induce political change. Washington should stay the course; its chances of success are only getting better and better.
Do read it all. I didn't want to attempt to summarize the alternatives and points.
The CCP could prove to be brittle and under threat whether Xi tries to tighten or loosen his grip. Although there is no assurance this brittleness will be demonstrated quickly (or be lasting).
I suspect China can only slow the decoupling and not stop it. The CCP may not have any choice but to export what we'll take to slow decoupling and hope for the best.
Because the worst might not be far from my scenario for what could happen to an empire when the emperor falls.
