Saga and Marshall here. Welcome back to the realignment.

This week we brought Hudson Senior Fellow Dr. John Lee back on the podcast.

Now John has written a new white paper that's going into exactly how the American and the Chinese economies are going to decouple after the coronavirus crisis.

It feels like forever ago, but at the very start of this outbreak it became very clear that the US had unwittingly allowed itself to become dependent on China from medical supplies and other strategic and critical items.

And this crisis finally began the conversation.

So what's great about John's perspective on this because he wrote a paper is he's able to go into what exactly decoupling means, and how about different from disengling and even from diversifying Western economies away from the Chinese model.

So his perspective is particularly valuable for us because as you can tell from his accent he's based in Australia.

Listening to him is actually pretty clear with the debate over decoupling isn't really just about traded economics.

It's about a broader referendum on how a geopolitical picture is going to look moving forward. So let's dive in.

John Lee, welcome back to the realignment.

Well, great to be back. Thanks for having me again.

Good to see you John.

So we're following up with you because you've actually written a new report for Hudson that's focused on decoupling the US and Chinese economies because everyone started this conversation about how the US is going dependent on Chinese

manufacturing for really important critical things. So what's this dive in first with what is decoupling? What is it actually entail?

Well, decoupling is like an economic divorce. So it's like ending the relationship with your trade on investment partner. And it's the most extreme kind of kind of separation in half.

That is the divorce you end the relationship. There are less extreme forms. There are you can diversify so you can rely less on China or some other country.

You can disentangle a lot of your supply chains. That is you simplify your supply chains such that it becomes easier to leave China if you have to do so.

But decoupling is sort of the most extreme in state of an economic termination.

And so John, how exactly did we get to the point? I mean, this is something we've covered on the podcast many times, but I think that giving your your kind of vantage point from Australia as a somebody whose whose country has also had to deal with this in your own form.

How did it that the Western economies become so entangled with the Chinese in the first place?

You have to go back to geopolitics and after the Soviet Union fell, we didn't really feel like we being the West didn't really feel like there were any real threats out there.

So rather than focus on security, we all thought about the economy, which is understandable, but we thought in particular about what is the fastest and most efficient way to produce things for us to consume.

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