“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. Bloomberg has released its annual ranking of top-earning hedge fund managers for 2022. Tiger Global is, well, not looking so hot – thanks to bets on China, tech stocks, and startups. Tiger founder Chase Coleman lost some 1.7 billion USD last year.
2. According to the Financial Times, Singapore’s sovereign wealth fund, GIC, has significantly reduced its private investing in China, driven by concerns over Xi Jinping’s “common prosperity campaign” and fears of other unexpected moves by the Chinese Communist Party.
3. Nikkei Asia reports that Applied Materials, Lam Research, and KLA -– key US chip equipment suppliers – have begun to shift their operations from China to Southeast Asia in the wake of US export controls. Together, those companies control about 35 percent of the global market for chip production tools.
4. As Europe looks to shift toward solar energy, the bloc is trying to break reliance on China, which controls over 80 percent of the global solar supply chain. Per Italian Finance Minister Giancarlo Giorgetti, “we must avoid entering a new form of dependency.” Accordingly, EU leaders are meeting in Brussels this week to form a plan for subsidizing solar-panel producers to wrestle back the industry (and right as the US, China, and India are making similar investments).
5. Relatedly, US and European officials are discussing establishing a new group of allies to cooperate on procuring minerals relevant to clean-energy technologies, in order to shore up dependence on China. The “critical-minerals club” would start with trade agreements among a core set of allies (e.g., Japan, the EU, the UK, the US) then seek additional agreements with other countries.
6. Representative Chip Roy (TX-21) introduced the Bring Entrepreneurial Advancements To Consumers Here in North America (BEAT CHINA) Act to encourage the reshoring of manufacturing by providing tax advantages. Said Roy: “The Chinese Communist Party is the single greatest foreign threat to US national security, yet US-China trade still hit a record high in 2022. As long as we depend on China and the rest of the world to keep our shelves stocked, our economic prosperity, our political liberty, and our national security are all in grave danger.”
7. The Philippines accused China of using a “military grade” laser on a Filipino coast guard boat, temporarily blinding the crew and scuttling a mission to resupply a disputed shoal in what Manila refers to as the West Philippine Sea. This is just the latest in China’s use of aggressive – and yet not explicitly military – methods to enforce its claim to the South China Sea.
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