“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. In its 2022 Annual Report, the congressionally-mandated US-China Economic and Security Review Commission called on Congress to assess Beijing’s compliance with the 1999 agreement that awarded China Permanent Normal Trade Relations status – and consider suspending that status pending findings. This recommendation dovetails with our research this summer, which found that the American public supports revoking China’s Permanent Normal Trade Relations status.
2. According to Barron’s, “Ford shows that reshoring US manufacturing is happening.” The company has begun building an electric vehicle manufacturing complex in Western Tennessee; on Tuesday, co-CEO Jim Farley said that Ford will need to manufacture more components for electric vehicles in its own factories. He told reporters that Ford was “going back…to our model A,” when the company built many of the components for vehicles in Dearborn, Michigan.
3. PFA, Denmark’s largest commercial pension fund, has exited two Chinese clothing manufacturers and is considering cutting its China exposure more broadly as political risk associated with Chinese companies grows. Earlier this year, Norway’s sovereign wealth fund, the world’s biggest, removed Li Ning from its portfolio citing human rights violations in Xinjiang. And because three makes a trend, in an interview this week, venture capitalist Tim Draper – of Tesla, SpaceX, and Baidu fame – said that he is confident in his decision to stop investing in China: “It’s not a place where you invest money to get a return…I see China as a place where the government is trying to control everybody.”
4. Metal parts specialist Brandauer and skills provider In-Comm Training have jointly invested 1 million pounds to establish the Precision Tooling Academy in the UK, a toolmaking and training service intended to solve an industry-wide skills shortage and support domestic manufacturing. The center will serve as both a commercial toolroom and a training ground. “Exchange rates are already boosting a recent reshoring trend that has seen us win new tooling projects back from China and other low-cost countries,” said Brandauer’s CEO, Rowan Crozier.
5. On November 15, auxiliary equipment and parts handling product supplier MAC Automation Concepts completed a major expansion of its Illinois headquarters to handle an upswing in sales attributed to trends of reshoring and automation. A day later, Code Corporation, a barcode scanning and data capture technology company, held a homecoming celebration as it opened a new, Utah facility to reshore product fulfillment, packaging device configuration, and a share of its research and development – all of which had previously been conducted in Singapore.
6. US chip maker Nvidia reported a 17 percent year-over-year quarterly revenue decline on Wednesday, based on weakening demand from China – a function both of US export controls and Beijing’s zero-COVID policies.
7. “What is Friendshoring?” asked a New York Times column on Friday. The piece cited former deputy administrator of the US Agency for International Development Bonnie Glick for the term’s early development, and described its new omnipresence across US policy discourse.
(Photo by Pexabay/Pexels)
