China Growth Worries Drive Japanese Pivot Towards US
(18 April 2024 – Japan) Chinese economic growth fears and growing supply chain interference by Beijing have contributed to a significant about-face by Japanese exporters towards the United States (US).
While Japan remains tied to China through extensive trade and manufacturing operations, Tokyo has pledged with other members of the Group of Seven (G7) nations to "derisk" but not "decouple" from the world's second-largest economy, Daniel Leussink and David Dolan report for Reuters.
"The illusion about the Chinese economy, the Chinese market, is disappearing. I think Japan and the United States started to discover the merits of each other” said Canon Institute for Global Studies Research Director, Kunihiko Miyake.
Newly released East & Partners “On Demand” research reveals not only how many large global corporates are considering shifting all or part of their supply chain away from China to other markets but importantly, why?
Over one in two Top 100 revenue ranked corporates in each of eight markets across Australia, China, Hong Kong, Singapore, UK, and USA have either switched partially/in full or plan to switch in the next 12 months/12 months plus.
“Key drivers of supply chain recalibration vary markedly by market and include escalating regional geopolitical tensions, cheaper solutions elsewhere, corporate default risks, significant RMB depreciation, supplier defaults, altered credit terms and the risk of local government debt default. Of particular note is the enormous variance in demand for trade corridor realignment among major Asia based multinational corporates between China, Hong Kong and Singapore” East & Partners Global Head of Markets Analysis, Martin Smith commented on the results.
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