Report suggests total economic decoupling from China may be challenging
Date
5/21/2024 7:48:42 AM
(MENAFN) According to a recent report by international insurance company Allianz Trade, achieving total economic decoupling from China would be "difficult, if not impossible." The report highlights China's status as a "critical supplier" for much of the world.
The survey conducted by Allianz Trade involved over 3,000 companies across China, France, Germany, Italy, Poland, Spain, the UK, and the US, gathering insights into their outlook for global trade in 2024.
The report underscores the varying degrees of import dependency on China, with countries like the US, UK, and France among the most exposed. It reveals that nearly 50 percent of US imports from China are considered critical dependencies.
“There is no evidence of a full decoupling from China yet,” the report declared, the report also notes that more than one-third of respondents expressed intentions to increase their presence or business activities in China.
In spite of discussion of decoupling and expanding away from China, “there is probably a limit to what extent this can happen,” Allianz declared, further mentioning that European nations still strong around their prospects there.
According to the survey, approximately 39 percent of companies in Germany and Spain, as well as more than 30 percent in France, anticipate expanding their presence in China. In contrast, 27 percent of companies in the US have similar plans for increasing their footprint in China.
“European companies are clearly less worried than US firms,” the report mentioned.
Allianz highlighted that the trend toward diversification rather than decoupling appears to be more pronounced. Around a quarter of companies surveyed in Germany, France, and the US anticipate that their presence in China will constitute "a smaller share of their global supply investments going forward."
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