Wealth Outlook 2024 - Slow then grow

103 Wealth Outlook 2024 | Unstoppable trends The implications of G2 polarization on global technology Forward implications The upcoming decade could be fraught with tension. While Taiwan’s electorate seems like it could be more reluctant to stir the pot, its January 2024 elections will be watched carefully by China, the US will be monitoring China’s reactions, and vice-versa. The November 2024 US election cycle is apt to come with hawkish geopolitical rhetoric. Looking past the rhetoric, actions like deterrence and the projection of military power could determine if the floor for future areas of engagement and cooperation between the world’s two largest economies rises or falls. The Biden administration describes its sensitive technology strategy regarding China as a “small yard and high fence.”² ² Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution, April 27, 2023 The meaning of “small” has varied over time. The administration considered restricting investment in Chinese companies working in biotech and critical mineral mining. There was also a question as to whether chip-related prohibitions would extend so broadly that they could start to severely impact China’s electronics and EV industries, not to mention the profits of large Western tech companies for whom those industries are a major market. In recent months some more clarity has emerged. After the latest updates issued in October, a few US and European chip designers and equipment makers balked at the stepped-up provisions closing loopholes in the types of high-end technology banned, while also acknowledging that they do not at this time anticipate a material effect on sales. China has carved out some more breathing room for itself as well. Huawei’s latest cell phone, the Mate 60 Pro, features breakthroughs in 5G and integrated circuit chip manufacturing and comes with satellite communication capability – something even the iPhone does not have. China’s response to tech competition As part of the Western embargo, China can no longer import the world’s most advanced chipmaking technology – Dutch-made “extra ultraviolet” (EUV) lithography machines. As a workaround, China has developed a new process using a particle accelerator to imprint the nanoparticle-sized circuity. A vast factory is now under construction in Xiongan. As recently as