Shannon Brandao
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"Reuters [excerpt]: U.S. furniture company head Jordan England thinks his firm's Chinese suppliers are among the best in the game, but #geopolitics and a slowing #economy have pushed him to source more products from Southeast Asia, Eastern Europe and Mexico.
'I'm looking to move away from it (#China),' said England, CEO and co-founder of Florida-based Industry West.
'It was always "China plus one,"' he said, referring to the diversification strategy many businesses began implementing after Washington imposed trade tariffs on Beijing in 2018 to ensure they were not wholly dependent on Chinese suppliers.
Now 'it's like "plus-10" and then China,' he added, with the latter down to providing half of Industry West's products and being trimmed more.
Foreign #investors have been sour on China for most of this year, but data released over the past month has provided clear evidence of the negative impact de-risking strategies are having on the world's second-largest economy.
Activity surveys showed manufacturing unexpectedly contracted in October, while exports accelerated their decline. China recorded its first-ever quarterly deficit in foreign direct investment in July-September, suggesting capital outflow pressure.
Nicholas Lardy, senior researcher at the Peterson Institute for International Economics, said in a note the new data imply that foreign firms are not only declining to reinvest earnings, but are selling existing investments and repatriating funds.
This trend could further weaken the yuan and clip China's economic growth potential, he added.
...[China, of course,] is outwardly confident about growth despite a global economic slowdown, with policy advisers favouring a target of about a 5% expansion of gross domestic product in 2024 and the country aiming to double the economy's size by 2035.
But England said he is concerned about how his Chinese suppliers that also produce for the domestic market will cope with the country's severe property market downturn.
'I'm worried about these factories going from 500 workers to 200, to 100,' he said.
OPEN FOR BUSINESS?
[Chinese] Premier Li Qiang's overtures declaring China open for business to foreign investors after the pandemic have been greeted with scepticism in some Western boardrooms in light of a broader anti-espionage law, raids on consultancies and due diligence firms and exit bans, trade bodies say.
Li is expected to make a similar call on Tuesday at the country's inaugural China International Supply Chain Expo, which it is expected to use to tout its supply chain advantages."
"European firms have raised fair competition concerns about state-directed lending to Chinese manufacturers, while Noah Fraser, managing director of the Canada China Business Council, said 'bad blood' remains over the detention of two Canadians from 2018 to 2021."
#news #business