CKGSB Knowledge - China Business and Economy

Codependent Partners

The rapid deterioration in relations between China and the United States over the past 12 months has left many scratching their heads and wondering how we got here. Stephen S. Roach is not one of those people.

A former Chief Economist of Morgan Stanley, Chairman of Morgan Stanley Asia and currently Senior Fellow at Yale University’s Jackson Institute for Global Affairs, Roach has been watching the development of Chinese-US relations closely for more than three decades. For him, a tariff war between the world’s two largest economies was as predictable as it is harmful.

In his 2014 book, Unbalanced: The Codependency of America and China, Roach warned that growing bipartisan anger toward Beijing in Washington was making “the unthinkable Bad Dream” of a Sino-US trade war a real possibility. The reason did not lie with the policies of a particular leader, but the pathologies of the economic relationship itself. Like two needy partners, America and China had become trapped in an economic embrace that was unsustainable for both of them.

In this interview, Roach explains how this codependency developed, and what the two economies need to do to avoid a messy divorce.

Q. Why did you decide to use the concept of codependency to describe the US-China relationship?

A. After spending most of my career analyzing and writing about the United States, I

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