Will foreign firms shift out of China?
Recently, HSBC was reported to have established a Chinese Communist Party (CCP) committee in its Shenzhen-based investment bank subsidiary in accordance with Chinese law. This is one indication, argues George Magnus, that China is starting to use regulation to bring major entrepreneurs to heel and private firms under the control or influence of the party. In addition, China wants to de-Americanize its supply-chains, focusing on self-reliance in an effort to sanction-proof its own economy and financial interactions from the long arms of western governments and US dollar-dominated payments systems.
All in all, firms face a more controlling, politicised and repressive governance structure; an industrial policy that is even more state-centric than before; and the effects of a feistier geopolitical climate in the wake of China’s “without limits” pact with Russia.
Western companies stand in the crosshairs of China’s new reality
By: George Magnus – China Centre, Oxford University
The Chinese population has peaked
According to the 2022 Revision of the World Population Prospects, published by the UN Population Division (UNPD), China’s population has peaked—and in fact began shrinking earlier this year.
China’s rate of population decline is projected to accelerate, to 0.1 percent per year by the end of this decade, more than a quarter of a percent annually in 2035, and nearly 0.5 percent per year as soon as 2045. That trajectory would bring China’s headcount down to 1.31 billion by 2050—about 115 million below the UNPD’s current 2022 estimate.
The main reason behind the population decline is plunging Chinese childbearing, a trend that is estimated to have started in 2016, the year after the One Child Policy was shelved!
Is China Shrinking?
By: Nicholas Eberstadt, Peter Van Ness – American Enterprise Institute
China’s slice of the trade pie is under mounting pressure
With the world beset by climate change, pandemics, and a shocking new war in Europe – to say nothing of mounting inequality and related social and political tensions – globalization’s defenses are in tatters. And China may well have the most to lose.
Deglobalization’s China Wild Card
By: Stephen S. Roach – Yale University
