In the past, the U.S. dollar and Chinese yuan used to move inversely. Recently, that has not been the case. The dollar is appreciating, and so is the yuan. Are the bilateral currencies decoupling?

In 2018, Steve Bannon, then-US President Donald Trump’s chief strategist, argued that the United States needed to “decouple” from China. Since then, the term has become a fixture in discussions of Sino-American relations – to the point that some, such as former Australian Prime Minister Kevin Rudd, have warned that it could become a self-fulfilling prophecy. How salient is that risk today?

While a recent speech by U.S. Trade Representative Katherine Chi Tai was filled with accusations and predictable slanders against China, it also reflected a somewhat more nuanced trend, showing that America is attempting to moderate relations.

As the U.S. continues its financial blockade against China, China can respond by opening up to foreign financial institutions and achieve recoupling.

Interwoven interests with the United States are a Gordian knot that cannot be cut without doing serious harm. Alarm bells are ringing in Washington.

Decoupling serves neither China nor the United States. Instead, it would impose grave economic costs on both countries at best and threatens a calamitous military clash at worst.

Innovation and further opening-up are the antidote to technological suppression by the United States. The difficulties it imposes are real, but they are temporary and surmountable. They only inspire us.

“Decoupling” is central to the geopolitical duel between the United States and China. Conceived and promoted by hawks in US President Donald Trump’s administration, this strategy has now become America’s principal tool to weaken Chinese power.

New regulations that require heightened scrutiny of Chinese investors in the name of national security only add to the risks Chinese enterprises face when investing overseas and nudge decoupling forward.

The coronavirus demonstrates the need for broader cooperation between China and the U.S. Now is not the time to decouple the bilateral relationship.