The link between China's catchup process and the China-US technology decoupling

What explains the decoupling between China and the US in selective technology domains? Leveraging insights from the literatures on co-opetition, innovation, and global strategy, we argue that the decoupling stems from the dynamics of cooperation and competition between the two nations. Initially, when China's technological base was low, the US had little interest in cooperating with China, resulting in neither cooperation nor competition. Later, since China's technological catchup reached a moderate level, the US adopted a cooperation-oriented approach to strengthen the China-US tie. Recently, after China's catchup surpassed a certain threshold, whether in terms of level or pace, the US shifted toward a competition-oriented approach. In this sense, technology decoupling is closely linked to China's technological catchup process. An empirical study with a sample of 15,578 technology class-year observations from 2008 to 2021 supports our theme about a U-shaped relationship between China's technological catchup process and the China-US technology decoupling. Further analyses reveal that the U-shaped relationship flattens when the US has more co-invented patents with alternative countries, but the same relationship becomes steeper with more co-owned patents between China and the US. An additional analysis shows that a similar U-shaped relationship could be also found in the earlier Japan-US relationships. The critical implications, both theoretical and practical, are discussed.