“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. Vanguard is winding up its China operations, parting ways with its last remaining employees and shutting down its office in the country, Bloomberg reports. This follows the company’s announcement in March that it would close its Shanghai-based wholly owned investment management unit and exit an investment advisory joint venture with Ant Group, citing a “crowded” market. Its departure marks a significant reversal in the firm’s China strategy.
2. A bipartisan group of US senators are opposed to a limited free trade agreement with Indonesia, which would allow the Southeast Asian nation’s critical minerals to benefit indirectly from Inflation Reduction Act subsidies. A key concern is that Chinese companies, which are dominant in the Indonesian mining and refining industry, could use that as a backdoor to tap US subsidies.
3. Apple’s sales fell for a fourth straight quarter, weighed down by a 2.5% decline in China—its third largest market—where competition from Huawei is heating up. In the three months up to September, Huawei’s smartphone sales grew 37% year-on-year in China, while Apple’s iPhone shrank 10%, according to Counterpoint Research.
4. Beijing has banned Communist Party members from engaging in private equity investing, in a bid to clamp down on opportunities for corruption and bribery. There have been cases of cadres setting up PE funds after they learned of key information of firms seeking to go public, and made “huge gains” after their initial public offerings, an official publisher of the graft-busting Central Commission for Discipline Inspection said in a recent article.
5. The Chinese commerce minister told Micron that China would welcome the US semiconductor company expanding its operations in the country, noting that the government will optimize the environment for foreign investment and provide service guarantees for foreign enterprises. The overture comes just after Beijing banned some of Micron’s products over their “major security risk,” following a cybersecurity investigation into the company.
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