The great economic decoupling has started, this is something that we've warned about since the trade war began. Years of elevated financial market volatility will follow as the world is sliced in half, with one side being controlled by the US, and the other side controlled by China.
The latest evidence of decoupling comes from Huawei Technologies CEO Ren Zhengfei, who spoke with The Wall Street Journal and said: "We can survive very well without the US. The China-U.S. trade talks are not something I'm concerned with."
In May, the Commerce Department blacklisted Huawei, the world's largest 5G equipment and smartphone producer, from doing business US firms.
Zhengfei said, "we have virtually no business dealings in the US" since the blacklisting.
Huawei was a major buyer of US semiconductors before it was blacklisted. Sales figures showed the company bought $11 billion of technology from US suppliers in 2018. The blacklisting has forced Huawei to find alternative sourcing.
Zhengfei said the company is rapidly expanding its 5G network products across the world without US chips. He said 5,000 5G base stations are being constructed every month.
Despite the blacklisting, Huawei is still purchasing some chips from US firms that produce offshore, where US restrictions don't apply.
Will Zhang, Huawei's president of corporate strategy, told The Journal that purchasing levels of US chips are at 70% to 80% of its previous level.
The Trump administration has spent at least 15 months creating Sinophobia across the world, by warning countries not to use Huawei 5G equipment because of spying concerns.
Zhengfei has denied the allegations that it spies on its customers or any government, though the Trump administration has labeled Huawei a national security threat.
Beijing views Huawei as a centerpiece of its economic success and is considered an essential piece of any future trade deal between the US.
The next several quarters will be critical for Huawei. That is if it can continue sourcing most of its chips from alternative producers and continue dominating the global smartphone space and the build-out of 5G networks across the world, then that will indicate the great decoupling from West to East is well underway.