BGA Senior Adviser Dr. Thitinan Pongsudhirak wrote an update for clients on the narrowing distinction between derisking and decoupling.n.

Context

  • Derisking was intended to reduce specific vulnerabilities while preserving economic interdependence, but the boundary between derisking and decoupling is becoming increasingly difficult to sustain.
  • Developments in biotechnology, competing AI ecosystems and technological standards show how individually defensible restrictions and commercial choices can cumulatively deepen separation.

Significance

  • Expanding restrictions risk creating “decoupling by accumulation,” while competing U.S. and Chinese technology frameworks could pressure countries to align more closely with one ecosystem.
  • An action-reaction cycle is taking hold as U.S. restrictions spur China to build indigenous capabilities, alternative institutions and new standards, prompting Washington to tighten controls further.

Implications

  • Companies must consider whether decisions involving investment, AI models, infrastructure and technical standards could create dependencies or alignments that become increasingly costly to reverse.
  • Southeast Asian and other middle economies face narrowing room to maneuver as pressure grows to choose between U.S. and Chinese technologies, markets, capital and infrastructure.

We will continue to keep clients on top of emerging derisking and decoupling trends and dynamics in geoeconomic fragmentation. If you have comments or questions, please contact BGA Senior Adviser Dr. Thitinan Pongsudhirak at thitinan@bowergroupasia.com.

Best regards,

BowerGroupAsia

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Senior Advisor

Thitinan is a renowned scholar, journalist and expert in international relations and domestic politics across Asia. He has spent more than three decades analyzing and advising on Thailand and the region’s political economy, geopolitics and policy. He helps BGA and clients understand in-depth the global, regional and domestic issues that affect business.  Thitinan is a professor of international relations and international political economy at Bangkok-based Chulalongkorn University’s Faculty of Political Science and a senior fellow at its Institute of Security and International Studies. He has lectured widely at local and international universities, military colleges and international organizations on political and ... Read More