Wealth Outlook 2024 - Slow then grow

102 Wealth Outlook 2024 | Unstoppable trends The implications of G2 polarization on global technology Almost half these job announcements have been in the electrical equipment category which includes EV batteries ( FIGURE 4 ). The computer and electronic products category incorporates solar panels, robotics, drones and semiconductors. The chemicals category: pharmaceuticals, renewable fuels and rare earth products. FIGURE 4 Percent of reshoring and FDI US job announcements by industry, 2023 projected All other Electrical industries equipment Chemicals Transportation equipment 8.6% 10.8% 11.2% 22.4% 47.0% Computer & electronic Source: Reshore.org as of Aug 18, 2023. For illustrative purposes only. All forecasts are expressions of opinion and are subjectto change without notice and are not intended to be a guarantee of future events. Western businesses leaving China US-China tensions and the slowing Chinese economy have chipped away at the confidence of US businesses operating in China. In 2023, the American Chamber of Commerce (AmCham) in Shanghai found that just 52% of 325 firms were optimistic about the five-year business outlook in China, the lowest level since the annual survey began in 1999.¹ ¹ AmChamShanghai Releases Report on Business Climate in China. September 18, 2023, www.amcham-shanghai.org/en/article/am- cham-shanghai-releases-report-business-climate-china Uneasiness over China’s policies and regulations toward foreign companies were another area of concern. One key takeaway is that 40% of these firms, up from 34% a year ago, are currently redirecting or looking to redirect investment originally intended for China, mainly to Southeast Asia. Part of this may reflect a wider shift in global manufacturing and supply chain management. But some firms clearly view US- China relations as being important to their business success, with 46% believing that the bilateral relationship will continue to deteriorate. At the same time, the size of China’s market, its influence and its growing middle class cannot be ignored. When asked about moving existing manufacturing and sourcing outside of China, 74% of the US firms in the AmCham survey said they were not considering it. But it seems a growing number see manufacturing in China these days as a strategy for selling in China rather than as a strategy for more efficiently selling to the entire world. China has also been on the move. The US high- tech embargo and sanctions on China have pushed China to become more self-reliant and innovative. The result has been that Chinese companies have been making significant strides in semiconductor manufacturing and the fifth and sixth generation (5G and 6G) of mobile communications. That’s in addition to China’s leadership in 37 of 44 technologies tracked by the Australian Strategic Policy Institute, in fields ranging from batteries to hypersonics. China’s particular strengths include nanoscale materials and manufacturing, hydrogen and ammonia for power generation and synthetic biology, to name a few.