Globalism 2.0

Globalism 2.0.  Episode  17:   

All In On Mexico… 

(Another ChinaPat presentation)

• The end of the story: If your supply chain / manufacturing is in China and you are planning to someday, definitely take a serious look at alternatives - then this is your day.

In this episode:

• All in on Mexico, but… The good news, the bad news, and the potential for a China presence.

Protectionism Gets Ugly

1. Food protectionism.

• Remember – for every natural problem there will be a bureaucratic response that is potentially more dangerous and damaging.  Check your supply chain for vulnerabilities.

2. US prestige in no longer a question. It is falling. 

• Snubs from the South, confusion in Asia…  front line decision-makers from the US have to prepare for the era of No Soft Power. 

3. BEA in Mexico. Let’s talk about CRIME.

• Types of crime

Globalism 2.0 Episode 15. Governments and Corporations Unite Against Consumers!  Saying the quiet parts about STATISM out loud. 

Also: BEA on Mexico – STEEPLE Analysis

This week Globalism2.0 looks at STATISM – the blurring of lines between states and corporations. Everyone’s doing it – but the US approach and Chinese approach LOOK different in the formative stages. End of the story – Statist actors from all over will get along just fine.

• Comparing US and Chinese Statist behavior. Chinese actors are directed by the Party, while US policymakers and bureaucrats take their cues from corporate strategists. We’ll look at Cosco Shipping and Amazon as cases.

This week we look at 2 summits between the US and leaders of key emerging markets – ASEAN and LatAm.  These should both be slam dunks, but as we’ll see the Biden Admin is encountering resistance.

• Business culture – the key challenge to building profitable, durable long term business relationships.

Introduction to BEA (biz environment analysis).  The case is Mexico.  The assignment - build your Information Plan about Mexican business & culture.

• To help us build our Information Plan about a new culture, I’ve prepared a simple quiz for ChinaPats about Mexico business.

1.Port of Manzanillo (Mexico)

2.Maquiladora  

3.Shelter Company / Shelter Arrangement

4.IMMEX  

5.E.E.U.U

6.North American  

7.AMLO 

8.Morena Party

9.T-MEC 

10.TIPAT

11.CBX

12.Litio 

13.CFE 

14.La Iniciativa de la Franja y la Ruta

15.Exploiter

You can take your SUPPLY CHAIN out of China, but you can’t take CHINA out of your SUPPLY CHAIN

• The discussion is no longer about IF you should shift your supply chain out of China/Asia, but HOW?

#globalism2

1. Spheres of Influence are Re-forming

• The anti-Russia efforts have been led by Europe and the US.

2. Are we already in Economic Word War 1?

• US Treasury is actively pushing Russia into default.

3.LatAm is the place to be – and everyone knows it but you.

• Well – not really. But CrunchBase is reporting that LatAm was the #1 recipient of venture cap funds in 2021.

Globalism 2.0  Ep 10:  Is Globalism dead?   For now.

1.No more normal.  Negotiations in Ukraine are just a new front in the ongoing war.  The international coalition supporting Ukraine isn’t quite as comprehensive as we once thought.  India, LatAm, MENA, and Africa are all in play.

2.Dollar dominance under threat?  Yes…but the Yuan isn’t gaining.  Cryptos & baskets of “boring” national currencies (think Canada, Finland, etc.) are growing.  Spoiler alert:  Central banks like transparency and stability.

3.What about China?  The REAL sanction package is going to be aimed at China.  This was always the plan – since 2018.  Red states – and those that want to run them – see China as the new “holy war”.  Russia is practically an old buddy to the politicians writing anti-China rules (on BOTH sides of the aisle).

1. The Chain of Disruption – the slow moving train wreck of sanctions & logistics breakdowns  - that is eating your supply chain.

• The new scarcities: food, fuel, and materials.

2. China is Next for Sanctions

• The Ukraine is just a distraction from the “real” competition -- CHINA.

3. Meanwhile, in other emerging economies.

• LatAm – exporting criminals to Silicon Valley. Venezuela and Guyana heat up.

1. China Wins the War -- by doing nothing.   The Chinese have a concept known as Wu Wei - to do by not doing (or to let things happen according to nature).  Trying to pressure the Chinese side to take specific action is a sure-fire way to make them dig in and wait for developments to become more clear.  

The newest MAGA problem. We’re winning the war, losing the peace.

2. Guns, Sanctions, Alliances. In the old days, infantries grabbed territory, sanctions grabbed headlines.  This round was different though… and China should be nervous.

3. Meanwhile in Latin America, MENA, and other dev markets... Columbia is upgraded to extra special BFF while China sets its sites on LatAm.  Saudi and India look at Yuan denominate petro trade.