WireScreen’s Post

USA and EU Policies of De-Risking The policy of de-risking toward China refers to efforts by the United States and the European Union (EU) to reduce their economic dependence on China and mitigate potential risks associated with it. This policy has gained traction due to concerns about various issues, including unfair trade practices, geopolitical tensions, and national security threats. Key aspects of the US and EU policy of de-risking toward China may include diversification of Supply Chains. Both the US and EU are seeking to diversify their supply chains away from heavy reliance on China. This involves encouraging companies to relocate manufacturing facilities or diversify suppliers to reduce vulnerability to disruptions and mitigate risks associated with overreliance on a single country. TSMC (Taiwan Semiconductor Manufacturing Company) is indeed a global leader in semiconductor manufacturing, and expanding its footprint strategically around the world is a significant part of its growth strategy. As of my last update, TSMC had announced plans for several key developments: 1. **Arizona, USA**: TSMC has announced plans to build a semiconductor fab in Arizona, representing a significant investment in the United States. This move is seen as part of a broader trend of bringing semiconductor manufacturing closer to key markets and reducing reliance on overseas production. 2. **Japan**: TSMC has been considering setting up a semiconductor fab in Japan. This could be seen as a move to cater to the demand from Japanese electronics companies and to strengthen ties with a key market.

This is what happens when we let government play in world trade playgrounds. I struggle with this, since it's tied politically and those will start the blame game. In reality, this is a very complex business. Intertwined with USA, EU and Asian markets. Which influence front end planning market share, current supply chain resources, technical people skills and end users. Something our US government has historically failed. In this case, our government limiting sales and market ownership. https://lnkd.in/eipseD86

It looks like we should be worried about the profit growth of US firms. A recent study reports that US firms that entered global markets such as China benefited from significant profit growth, while only domestic firms faced flat growth (https://lnkd.in/es_Dc3qG). Juxtaposed is this news story that China is attempting to de-America itself and manufacture the products internally. What is the future for American firms, especially those with a big China presence going to be like?

China’s Ministry of Commerce demanded, according to Xinhua, that the U.S. “earnestly respect the market economy and the principle of fair competition, and provide an open, fair, just and nondiscriminatory environment for enterprises from all countries.”Either irony is dead, or the Chinese Communist Party has a subversive sense of humor. Its entire economic model revolves around selectively flouting principles of the market economy and fair competition, including by systematically discriminating against foreign enterprises. China’s state capitalism has so effectively tilted the international playing field in its own favor that it has forced others, including the U.S., to adopt their own versions of state capitalism. Investment isn’t crafted for maximum return but political expedience. Executives avoid saying anything that might offend people in power. The line between state capitalism and crony capitalism blurs as companies seek to defeat their competitors in the corridors of power rather than the market.

“If you have all these issues with market access, red tape, geopolitical tension, and supply chain concerns; and on top of that, you’re not making as much money in China as you are outside, the question becomes, why China?” says Jens Eskelund. In this week's cover story, we did a sector by sector review to determine the challenges and prospects multinationals face in China, and where optimism still exists. https://lnkd.in/grbv3RcM

Welcome to the 207th edition of Trade War. In an effort to reassure spooked investors Xi meets with top American executives in Beijing. And down on tropical Hainan Island, the annual Boao Forum for Asia provides a sunny picture of the Chinese economy. A new report warns that overcapacity is “setting China on course for a trade confrontation with the rest of the world.” And China’s stocks have slumped once again after a March policy-driven rally. Radio Free Asia is shutting its Hong Kong office following the imposition of a tough new national security law. And Chief Executive John Lee’s popularity has plummeted to a new low. *Tesla’s deep reliance on China is drawing attention of US policymakers *Smartphone maker Xiaomi is moving into electric vehicles *And new report advocates for “Scholarly Recoupling” between the US and China Get the whole shebang. Become a paid subscriber to Trade War and never miss out on the China news.

#TBT to three years ago when our TradeMatters topic: Made in China, of Course. But, What about Made in the U.S.A.? by Ken Roberts shared top commodities going to #China. Update 2021 to 2024, U.S. goods to China 💻 U.S. made computer chip exports to China (China now 2nd behind Mexico for these, after ranking first) 💻 U.S. made semiconductor part exports to China, now our most important market 💉 U.S. made Medical instrument's top market is now The Netherlands Watch now: https://lnkd.in/e8NN4NCN Data-driven storytelling, made simple.

Contrary to politicians in Washington and European capitals, who are in the business of winning elections and spending tax payers money, CEOs of MNCs actually need to deliver profits to their shareholders. Unsurprisingly their views on China differ vastly from the Sinophobic nonsense coming from Washington and Brussels. […] Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group, said that China is the biggest car market in the world, and it's the biggest market for Mercedes. We do business here, and most of our operations are here, so we build almost all the vehicles that we sell in China. Jean-Pascal Tricoire, Chairman of Schneider Electric, told us that "every year makes China different or leads to a different China. So, I always come here, try to understand, meet new people, and learn and collaborate with them." L’Oréal Chief Executive Officer Nicolas Hieronimus said that "China is a great, super-sized market with a fantastic potential, but more importantly, it continues to transform, to reform, to open up and to support the economy in a very high-quality development direction." […] #china #business #mncs #market #consumer #technology #innovation #marketsize #growth

I am often asked by Chinese friends who will win in November and how the winner will impact US/China relations. Anyone’s guess is as good as mine, and most people seem to think that there will be little difference between the two candidates’ approach to China in the near term. I would tend to agree: The two countries are sadly ignorant of the other; tend to misunderstand and underestimate the other’s strengths while overestimating weakness; and tend to believe they can “win” the economic future with economic pressure and protectionism. This approach is leading, in my view, towards a world with Balkanized and fenced-off spheres of influence. The critical question in that world is not what goods you keep out (ie, through tariffs). It’s what you make that the world wants. Who will innovate relentelessly? Who will waste less time on dogma to spend more on experimentation, frankly acknowledging successes and failures? Who will keep their population sufficiently healthy, educated, and engaged to work through the significant social changes banging on the gates? These are not rhetorical questions, and I have no answers. Both counties face significant challenges from different angles IMHO. https://lnkd.in/gz98uTPr