Recently Jonathan Bench spoke with KSL Radio about China’s recent economic problems. In the interview, Jonathan discussed the increasing number of foreign investors reducing their footprint in China. Bench sees Vietnam as among the next rising economies to which international companies will (and should) turn to. Read more here, about why China’s loss is Vietnam’s gain.
What Happened to China’s Economy?
Though most economies experienced a “post-COVID bump,” a sudden economic increase as countries returned to pre-pandemic operations, Jonathan confirms that China’s economy hasn’t bumped at all.
“Most people thought China’s economy would rebound post-Covid, but it has largely stagnated. Utah has a solid business relationship with China, but manufacturers continue to look for nearshoring options. And companies staying in China for the China market are trying to figure out how to deepen their engagement while lamenting the fact that their prior engagement with the government is not as helpful as it used to be.”
Utah home goods retail giant Malouf Companies began diversifying its supply chain away from China to countries like India and Mexico. Since 2019 the company has reduced its direct China dependency by 50%. They are clearly not the only company focused on mitigating China risk. China’s alarm bells rang earlier this year when Mexico surpassed China as the US’s #1 trading partner. This is not a surprise to Bench, who has had many conversations with clients and partners in Mexico regarding global supply chains and the reinvigorated US-Mexico trading partnership on the back of the revitalized United States-Mexico-Canada Agreement (USMCA) that went into effect on July 1, 2020.