THE UNDERWAY GLOBAL DECOUPLING WILL ENDURE
The global decoupling from China may endure. The digital revolution, the fight against climate change and the new cold war are likely to outlast the effects of the pandemic and could herald a new era of growth in the emerging world.
During the last golden age for emerging markets, after the turn of the millennium, many prospered mainly by supplying parts or raw materials to China — then the rising “factory to the world”. Now, they have more options.
To say China matters less is not to say it doesn’t matter. China is still the leading trade partner for more nations than any other and the main global buyer of commodities.
Should, for example, its campaign to reduce massive corporate debts, particularly in the property sector, end in a meltdown, the effects will be global and inescapable. But lesser tremors may no longer be so consequential. It may be that when China stumbles, the world no longer falls with it.
Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist, is author of The Ten Rules of Successful Nations.
Source: Channel News Asia