During an interview with Bloomberg aired on Friday’s “Wall Street Week,” Willett Advisors CEO Steve Rattner, who also served as counselor to the Treasury Secretary in the Obama administration, discussed his recent trip to China and said that China is “very focused on the possibility or the desirability of trying to make more of their stuff outside of China so that it’s not ‘Chinese’ anymore and would come into the U.S. more easily.”
Rattner said, “There can never be a complete decoupling. We get all of our bicycles from China. We get all of our toys from China. You’re not going to be able to re-source those from other places. But yes, it’s like, if you think of it as a spider web, the spider web is starting to disentangle a bit. The Chinese are very focused on the possibility or the desirability of trying to make more of their stuff outside of China so that it’s not ‘Chinese’ anymore and would come into the U.S. more easily.”
He continued, “But we also have to recognize there’s a cost for both economies associated with this decoupling. The coupling helped us have very little inflation over the last ten years until recently because of lower costs. As you decouple, by definition, you’re sourcing stuff in a more expensive way. And obviously, the Chinese are losing business. So, it really is a lose-lose. There [are] obviously good national security reasons to try to reduce our dependence on them, but nobody should kid themselves, it is a lose-lose.”
Follow Ian Hanchett on Twitter @IanHanchett