2. Index for the fourth quarter of 2022
Figure above shows the three major sector indices and the overall index in the fourth quarter of 2022, as well as historical data since 2018. A smaller index number indicates greater decoupling, and zero indicates complete decoupling. In the fourth quarter of 2022, among the four indices, communication equipment has the highest degree of decoupling, and it is almost completely decoupled from China. Semiconductors are the least decoupled. Compared with the first quarter of 2018, instead of decoupling, the semiconductor sector between the two countries has a deeper connection. In terms of the overall index, due to the higher weight assigned to semiconductors, it makes the overall index less decoupled compared with the first quarter of 2018. In addition, semiconductor equipment showed a slight decoupling compared to 2018.
Although the current degree of semiconductor decoupling is low compared with the first quarter of 2018, it can be seen that the two countries have clearly moved towards decoupling if compared with the second quarter of 2021. The semiconductor decoupling index has dropped from 178 in the second quarter of 2021 to 112 in the fourth quarter of 2022, a rate as high as 37%. Similarly, semiconductor equipment has recently experienced accelerated decoupling. The decoupling of communication equipment occurred earlier. Since the third quarter of 2018, there has been an obvious decoupling in this sector. In addition, it is worth mentioning that almost all indices have risen first and then fallen. This is mainly because Chinese manufacturers have accelerated imports from or exports to the United States during the gap between policy announcement and actual implementation or during the initial exemption period.