Why has the United States (US) changed its stance toward China and kept it in the digital economy domain, despite the change in its government? The extant literature finds causes from China yet barely addresses perceptual factors. This study, however, argues that the strategy and policy of the US have undergone a process whereby the US has securitized the domain by designating China as a threat instead of a risk. Furthermore, the US has internationalized securitization to include its allies and close partners among the Indo-Pacific countries. Analytical narratives examine the US’ economic statecraft, including commercial, industrial, and investment policies. A close examination reveals that the US-China technology competition has been undergoing partial decoupling in global supply chains of critical technologies.

The immediate cause of the East Asian states’ pursuit of new economic statecraft, which has led to changes in the regional order, was the rise of US-China strategic rivalry. However, one structural factor behind the adoption of this statecraft is the economic network formed in East Asia. The emergence of new economic statecraft has had systemic effects, such as the spread of network sanctions, the adoption of divergent strategies, and the dual dynamics of cooperation and competition between states.