When Being the China Alternative Isn’t Enough
Cordial relations with Beijing and long-standing US ties may no longer be sufficient for supply chains to survive.
What happens to supply chains when being the China alternative isn’t enough?
Source: AFP/Getty Images
Being “not China” may have been the easy part. A big tout for manufacturing in several important Asian economies was that they enjoyed cordial relations with Beijing and solid historical ties to the US. Leaders didn’t mind taking a few rhetorical shots at America, if it was convenient for domestic politics, but professed no appetite for choosing between the two superpowers. This sort of opportunistic fudge is likely to get harder — and the consequences of a deeper transformation of trading arrangements stand to be profound.
Call it friendshoring or China+1, this was never an exit from the Asian giant but a hedging of bets. Malaysian Prime Minister Anwar Ibrahim’s pitch to a conference last year was illustrative: “I offer our nation as the most neutral and non-aligned location,” he proclaimed. And Vietnam officials deserve a medal for the number of times I have heard the nation proclaimed a trade-war victor.