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CHATTANOOGA, Tenn. (AP) — A leading authority on China’s zero-COVID-19 policy, geopolitical tensions and currency dangers says the country’s zero-COVID-19 policy has exposed an already fractured global chain.
Leland Miller, chief executive of China Beige Book, which compiles independent Chinese economic data, urges diversifying and differentiating itself from the world’s second-largest manufacturer and exporter of goods.
“What really broke the dam was 0 COVID because you’ve had all those problems,” Miller said in his keynote address at the F3: Future of Freight Festival on Wednesday. “I think a lot of corporations think they could just deal with geopolitical issues. They thought it was a much longer fuse than they were. But 0-COVID has shown that if the economy and supply chains can shut down, then any company with a presence in China can be in serious trouble.
China’s policy concerned extensive testing, strict lockdowns, and quarantines in an effort to restrict COVID cases.
According to Miller, companies are assessing their vulnerabilities amid ongoing geopolitical tensions with China and Taiwan.
“My message to CEOs would be to take off your blinders and be fair to yourself: ‘What are our vulnerabilities going forward?And are we doing enough to distance ourselves from China, given the threats we see in the future?” he said.
Speaking to policymakers in Washington, Miller said there is a willingness to address, to some extent, existing political tensions over exports, but he believes the U. S. government will be more concerned toward the end of the decade if tensions continue to worsen between the U. S. and China.
“I think there’s going to be a continued shift in the mindset of corporations in terms of what we can and what we can threaten to get from China,” Miller said. “What are our vulnerabilities? I think lately we’re at the very beginning of “This Stage. But I think we’re going to have a much tougher road in the next few years. “
China’s pandemic policy, implemented by President Xi Jinping, has highlighted the fragility of the origin chain, and brands are making significant investments in Vietnam, India, and North America, basically Mexico, to produce goods.
“For some years now, there has been talk of generation export controls. There’s now a technical decoupling going on, whether it’s semiconductors and things like the Fourth Industrial Revolution, from complex technologies and everything similar to 5G, AI, quantum, biogeneration, robotics,” he said.
As the Chinese government continues to grapple with an aging population and declining birth rates, investment firms that provide answers such as caring about the elderly, generating more young children and helping to inspire childbirth can be welcomed with open arms, Miller said. .
FreightWaves CEO Craig Fuller asked Miller if he was more positive about the U. S. economy compared to China’s over the next decade.
“Am I worried about the American economy? Absolutely,” Miller said. “But I’m more worried about the Chinese economy. “
China’s post-Covid policy has demonstrated the fragility of the global supply chain gave the first impression at FreightWaves.