France opposes ‘decoupling’ after economic talks with China

France opposes ‘decoupling’ after economic talks with China

Subject: Economy

Section: External Sector

Context:

French Finance Minister Bruno Le Maire said on Sunday that he opposes the “illusion” of countries “decoupling” from China and he does not believe the world’s second-largest economy constitutes a risk.

What is coupling and decoupling?

• In a globalised world, one part of the world affects countries all over. So, essentially all economies are connected. This is called ‘coupling’. 
  • When one economy collapses, it brings down overall world economic growth. The world markets that are too inter-connected  are called  ‘coupled economies’.
  • However, there are countries which are shielded from such an effect. These economies do not grow or slow down in sync with the world. They are called ‘decoupled’ economies.