Supply Chain Recalibration Gathers Pace Between US and Asia - GSR
(18 March 2024 – Global) Asia’s supply chains are trade corridors are shifting rapidly amid several important underlying economic shifts, Goldman Sachs Research (GSR) reports.
As China moves up the value chain and drives for greater self-sufficiency, it has reduced imports of intermediate goods while increasing imports of final consumer goods. China’s unit labour costs have risen from 30 percent of US equivalents two decades ago based on purchasing power to almost 70 percent as of 2019 in line with its industrial structure becoming more complex CTMfile Treasury News Network reports.
The Indo-Pacific Economic Framework deal headed up by the US will allow participant nations including Australia, India, Indonesia, Japan, Singapore and Thailand to work more closely in dealing with supply chain disruptions, such as in the event of a pandemic, by helping each other secure critical industrial items and minerals
“Companies’ post-pandemic focus on supply chain diversification and the US’s supply chain resilience programmes are also reshaping regional trade. Supply chains around advanced microchips have been shifting away from China since the pandemic outbreak in early 2020.”
“Accelerating innovation in AI and the US drive for supply chain resilience have boosted US demand for AI chips. All these developments have led to sharp increases in US-bound exports from Korea and Taiwan of AI servers and their advanced chip components.”
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