“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. General Electric will invest more than 450 million USD in its existing US manufacturing facilities this year. The investment includes over 335 million from GE Aerospace, which makes jet engines for Boeing and has more than 800 jobs to fill across the country.
2. US utility-scale solar installations fell by 23% in 2023 – pressured by a ban on products made from forced labor in China and rising costs from tariffs. With those forces set to stay, the question for the US solar industry is whether it can wean itself off China dependence.
3. According to Apple, its Chinese suppliers are moving capacity out of the country in an attempt to avoid escalating Beijing-Washington tension – while maintaining their footholds in the company’s supply chain. For example, GoerTek, a Chinese company, is investing 280 million USD in a Vietnam plant while considering an India expansion.
4. President Biden’s three-day trip to Europe – intended to underscore US commitments to its allies and the Ukraine war effort – concluded last week, on the same day Putin welcomed China’s top diplomat to Moscow while rallying pro-war Russians. In positioning that rings of the Cold War, both sides are shoring up their conflicting alliances. But unlike in the Cold War, these blocs, while at conflict, also include each other’s major trading partners.
5. China will impose a standard contract on companies sending personal data overseas, to come into effect on June 1. This tight control on cross-border data transfers, consistent strengthening of that control, and corresponding compliance costs have worried international companies doing business in China – as well as those concerned about Beijing’s overreach.
6. HSBC in an internal review admitted that it threatened human rights in a shift toward Asia that saw it support Beijing’s suppression of democracy in Hong Kong. This is the first time that the bank, which was originally established in Hong Kong and Shanghai and has a Chinese ownership stake, has admitted that its operations could impact human rights.
7. The newly established House Select Committee on China, chaired my Mike Gallagher (R-WI-8), intends to scrutinize operations of US companies, including private equity and venture capital firms, with substantial investments in China.
8. The Biden administration this week imposed export restrictions on 28 Chinese entities, part of a broader effort to mitigate a growing threat from China. These entity listings restrict sales to targeted firms without a license; the fresh round includes companies operating in the semiconductor, genetics, cloud-computing, and airfreight sectors.
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