For all the uncertainties in the debate about decoupling China and Western economies — and there are far more questions than answers — everyone agrees on one thing: It will be expensive.

While true, that simple fact doesn’t answer the one truly central question: Is it worth it?

That second question invokes the critical distinction between the price of something and its value. Decoupling will create losses — as economists define them — but there is growing conviction that something far more valuable, yet far less calculable, will be gained as a result: security.

Talk of decoupling is everywhere. It began with former President Donald Trump’s trade war against China and has since spread — fueled by the COVID-19 pandemic and intensifying geopolitical competition — to encompass virtually all facets of engagement between the U.S. and China and increasingly between the later and advanced industrialized nations.

Initial across-the-board cuts in U.S.-China trade gave way to an approach that zeroed in on high-technology goods to protect strategic assets. Governments limited procurement to trusted vendors that usually reflect national origins. This creates often incompatible stacks that lock in technologies and their standards, limiting economies of scale and raising prices.

This encourages the bifurcation of research, the separation of data and the creation of segregated national data banks. This in turn has yielded distinctively national forms of artificial intelligence, which learns from its unique database.

Inward foreign direct investment is subject to intensifying scrutiny. Under President Joe Biden, who has continued his predecessor’s trade policy toward China, the U.S. is anticipating the imposition of controls on outward investment. All this forces private businesses to separate operations into Chinese and non-Chinese divisions with firewalls that prevent the mingling of funds, people and ideas. This risks duplication, again increasing costs.

By the way, while the U.S. gets blamed for starting the decoupling buzz saw, China has been equally complicit. Stanford University’s DigiChina project has detailed Beijing’s energetic imposition of trade controls, restrictions on data handling, cross-border data flows and encryption, supply chain security reviews, financial untangling, limits of travel and visa issuance, website and app bans, and general efforts to reduce dependence on foreign countries. China has long prioritized autonomy in science and technology, and the promotion of national champions has been a pillar of its economic policy since well before the recent trade battles.

This approach is expensive. One analysis blamed the first year of the U.S.-China trade war for shaving 0.3% off U.S. gross domestic product and the loss of 300,000 jobs. A 2021 report for the U.S. Chamber of Commerce by the Rhodium Group found that extending the 25% tariffs imposed by the U.S. to all two-way U.S.-China trade would produce losses of over $190 billion by 2025 and potential losses topping $250 billion by 2030. It warns of a $1 trillion gap in potential output within a decade with full implementation of tariffs.

Forced to completely decouple, investment losses to the U.S. asset base in China are estimated to range between $25 billion to $75 billion a year. And since foreign investment has domestic dividends that increase aggregate GDP by several multiples, total losses to the U.S. economy could reach as high as $550 billion per year.

Global costs would be even higher. According to the Economist Intelligence Unit, a 100% increase in tariff duties on all Chinese goods and services, with a full embargo of all technology and national security-related sectors, would shrink global GDP by $52.8 trillion over the next 10 years. That’s like removing Japan from the global economy over a decade.

The World Trade Organization reckoned that a world of two separate trading blocs would decrease global GDP by 5%, and losses in emerging markets would be about 12%. An IMF working paper that focused on high-tech decoupling found losses of 0.6%-3.9% of output for China depending on the particulars of the sanctions, while U.S. output declined 0.4%-0.9%. Japan made slight gains in two scenarios but suffered losses as great as 1.1% in the other four. Another study by Alexander Sandkamp of the Kiel Institute for the World Economy found that decoupling the EU from China yielded real income losses of 0.8% in Europe and 0.9% in China.

Last year, Hidetoshi Tashiro, chief economist at Japan's Sigma Capital, warned that several major Japanese companies rely on the Chinese market for more than half their revenues; cutting them off would threaten their survival, which would impact the entire Japanese economy.

To take one sector, Boston Consulting Group estimated that U.S. semiconductor companies would lose 18% of their global market share and 37% of their revenues — and the resulting loss of 15,000 to 40,000 high skilled domestic jobs — if their government banned domestic semiconductor companies from doing business with Chinese clients.

There is at least one problem with these dark prognostications: The evidence of decoupling is, uh, thin. Official U.S. data, released earlier this month, showed bilateral goods trade between the U.S. and China reached a record $690.6 billion last year, with exports to China growing $2.4 billion to $153.8 billion, as imports from China rose by $31.8 billion to $536.8 billion. That topped the previous record in bilateral goods trade of $658.8 billion set in 2018.

Japanese companies seem equally committed to the Chinese market. In the 2021 JETRO survey report on overseas business operations by Japanese companies, China “remained at the top of the ranking for overseas businesses over the medium-term.” In the November 2022 JETRO survey of business conditions of Japanese affiliated companies overseas, 33.4% said they expect to expand business operations in China while nearly all others intend to maintain their current status.

The JETRO responses offer insight into how Japanese companies define “decoupling.” Many of them have “already decoupled” but that means they have built firewalls between internal operations to avoid falling afoul of national regulations.

That doesn’t mean decoupling is hype or an abstract concern. This new world is emerging and only the most prescient or pessimistic observers would have anticipated the hardening that is now evident. The impact should be felt on decisions that are only being made now.

So while indicators are likely to be lagging, there are troubling signs. According to the Bain consultancy, technology-related foreign direct investment between the U.S. and China declined by 96% from 2016 to 2020. Spending on local technology R&D swelled in the meantime. Another warning light: Researchers in the U.S. have noted that since 2019 there has been a decline in scientific collaboration with China that is not observed in collaborations with other countries — and this appears to be the result of geopolitical tensions.

If you don’t know what to believe after this avalanche of data, don’t worry — it doesn’t matter. A focus on the cost of decoupling is a mirage, a product of the economists’ obsession with efficiency traditionally defined, which is both a misplaced priority as well as a poorly captured concept.

Rana Foroohar, the Financial Times global business editor, makes the point well in her new book, “Homecoming: The Path to Prosperity in a Post-Global World.” An economy, she writes, is an operating system “that must choose between two mutually exclusive characteristics: efficiency or resilience.” We’ve opted for efficiency, and the kind of efficiency that is measured in corporate profits (or losses). That explains the proliferation of “just in time” production systems and the wringing out of every inefficiency to ensure maximum returns each quarter.

In this world, resilience — redundancy — is inefficient, if not waste, and to be avoided. That’s the wrong way to frame it.

I’d use another word for resilience: security. After all, survival — the ability of a network to absorb shocks and keep functioning — is the essence of security. And for those obsessed with costs, how do you value peace of mind? Security is an intangible asset that is almost impossible to price. We can figure out what it costs, but what is it worth?

From this perspective, decoupling reflects a reprioritization of national interests, one that puts the interests of a wider group of stakeholders ahead of the more traditional focus on shareholders. It recognizes the new geopolitical competition and the stakes that rest on its outcome — another variable that defies calculation.

There’s a powerful case to be made that Japan has been doing this for some time; although it has sometimes gone too far, neglecting allies and like-minded partners. Plainly, it too needs to better understand the costs of decoupling and the value of security.

Brad Glosserman is deputy director of and visiting professor at the Center for Rule-Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. He is the author of "Peak Japan: The End of Great Ambitions" (Georgetown University Press, 2019).