“Deglobalization” has entered the narrative zeitgeist. But what’s happening on the ground? This weekly series seeks to answer that question with a round-up of deglobalization developments from the week that’s done.

1. Growing numbers of leading biotech companies are considering using manufacturers in India to produce active pharmaceutical ingredient (API) for clinical trials or other outsourced work, according to Reuters interviews with industry executives and experts. The trend comes as Big Pharma seeks to hedge its risk and diversify beyond China. “All of the factors over the past several years have made China a less attractive option for us, said Dr. Ashish Nimgaonkar, the founder of Glyscend Therapeutics, a US-based biotech firm testing treatments for type 2 diabetes and obesity in early trials.

2. Global consultancies Deloitte and KPMG are asking their staff to use burner phones for trips to Hong Kong, the Financial Times reports, indicating their assessments of heightened exposure to cybersecurity risks when physically present in the Chinese city. The consultancies’ policies have in some cases already been in place for a year or more, but business travel to Hong Kong is only beginning to pick up again following the city government’s full scrapping of its Covid quarantine rules.

3.The China and Hong Kong units of PricewaterhouseCoopers’ were fined a combined 7 million USD by the US Public Company Accounting Oversight Board to settle allegations that over 1,000 workers at the companies engaged in widespread cheating on mandatory internal training courses and exams, the Wall Street Journal reports.

Separately, PCAOB also fined mainland Chinese firm Shandong Haoxin Certified Public Accountants 750,000 USD and four of its audit personnel a combined 190,000 USD for allegedly issuing a false audit report and plagiarizing another firm’s. It’s the first instance of PCAOB bringing an enforcement settlement against a mainland China-based firm over audit deficiencies.

4. Reuters reports that the West’s de-risking efforts are “[starting] to bite China’s prospects.” The effects are showing up in recent data: China’s factory activity unexpectedly shrank in October, and exports declined further. Plus, in a sign of capital outflow pressure, China recorded its first-ever quarterly deficit in foreign direct investment in July-September.

5. Not everyone is flocking for the exits from China, though. Quant hedge funds are betting on opportunities in Chinese financial markets as other investors flee, the Financial Times reports. London-based hedge fund Aspect is reportedly setting up an office in Shanghai, while Paris-headquartered firm Metori plans to launch a fund next year exclusively trading Chinese assets and targeting western investors.

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