In April 2021 , I had written ‘When an US president says to his public that ‘China is having our lunch’, he has drawn battle lines. Decoupling on the whole was wishy washy since the countries dependant on Chinese imports were reeling under the pandemic. That is changing, as vaccinations are taking effect. US – China economic decoupling is now ‘inevitable’. Tech decoupling is underway. The Supply Chain Resilience Initiative is active through the QUAD platform with industry associations commencing dialogue. Atmanirbharta will yield results in time. Xinjiang issue will swing EU back to USA. Pessimism in doing business with China is growing. Simultaneously, China is facing rising unemployment, dropping household incomes and low internal consumption. These are synchronous. In my opinion any decoupling 10-15% will start a cascade. 2021- 24 will be critical. In any case, the world is clear that it cannot be held to ransom by China. Things will change…Gradually…‘
Most of what I had written in the article above is coming true and it is being substantiated by these news reports from SCMP.
The true contours of decoupling started taking shape in Jul-Aug 22 when articles started appearing which indicated US resolve to move away from China and Chinese analysts started to opine how China could stem the tide.
By November, the writing was on the wall
Alongside the US attempts, India, Germany, and many other countries started putting in their weight.
The Chinese are pulling all stops and doing everything in their bag of tricks to retain businesses in China. However Mr Xi Jinping and his merry band of communist followers have done enough over the past two years to ensure that decoupling actually happens.
Apple has led the move out of China
Dell has now followed suite…when big ticket manufacturers start moving out, the small fish will follow….
Even the Chinese are decoupling from themselves !
Seems like the Chines fat is slowly getting into the fire.
Lastly. Autocracies are first half players. Aggressive. Early leaders. Always attempting to be start to finish winners. Democracies are second half players. Apparently lazy and disorganised. Greater stamina. They counter punch. Late finishers….Understand this and everything falls in place. Gradually……
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