“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. The US consultancy Gallup is pulling out of China, the Financial Times reports. It’s the latest foreign firm to quit the country as western consultancies and business intelligence firms face increasing scrutiny, police raids, and arrests. “Regrettably, Gallup has made the decision to close its operations in China,” the company said in a notice.
2. More executives have vanished in China, the Wall Street Journal reports. Chen Shaojie, chief executive of livestreaming firm DouYu, has been unreachable since October, a source told the Journal. Meanwhile, Shenzhen-listed Shandong Wohua Pharmaceutical said that its chairman, Zhao Bingxian, has been detained and asked to cooperate with an investigation.
3. Speaking at a conference hosted by Nikkei this week, Morgan Stanley CEO James Gorman argues that decoupling from China is likely to be a temporary trend. He said that consumers “won’t go backwards,” and will consume what they want, even if the things they buy come from abroad.
4. Siemens AG CEO Roland Busch tells Bloomberg that global manufacturing’s operating model for the past several decades is “somehow broken,” and that the company is now reassessing where it bases its production. “The operating model was basically offshore any kind of manufacturing to low-cost countries and mainly to China, which was perfect for saving costs,” Busch said. “But obviously it broke. It broke for many reasons; geopolitics is one, but also Covid taught us that the dependency is too strong. So we have to rethink.”
5. “For America to become a powerhouse in advanced manufacturing, it must transform its model of capitalism into that of Korea, Germany or Japan,” writes Kim Byung-yeon, chair professor at Seoul National University. In part, this means changing the makeup of the American workforce, he argues: currently, South Korea, Germany, and Japan have a manufacturing sector that contributes 25%, 20%, and 19% to their respective GDPs—while the share in the US is only 10%
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