Investment Institute
Macroeconomics

Decoding China’s regulatory paradigm shift


Key points

  • China’s status as the world’s factory and top exporter has come under intense pressure from the Sino-US trade war and a global pandemic that has disrupted supply chains
  • But instead of weakening its position, these adversities have been turned into advantages, with China actually gaining market share by broadening its export scope and strengthening its supply chain network
  • The growing resilience of the “world’s factory” follows a transformation of China’s domestic production system from cost-based competition to skills-and-technology-based
  • The rapid emergence of China as a manufacturing and export powerhouse has reshaped the landscape of global trade. Developed countries, led by Japan – and to a lesser extent the US – have lost market share to China in medium-and high-skilled segments
  • Yet, rising production costs have eroded China’s competitiveness in some labour-intensive industries in recent years, where Vietnam has made the most gains
  • However, constrained by its small size and reliance on China’s provision of critical inputs, Vietnam is unlikely to fully replace China as the world’s factory, but could continue to thrive as a partner in China’s supply chain ecosystem
Read the full article
Download article (469.72 KB)

Related Articles

Macroeconomics

Forget the market noise: Focus on value and the long-term

Macroeconomics

U.S. 2024 presidential election: The potential global impact

Macroeconomics

Could the U.S. presidential election endanger an investment boom?

    Disclaimer

    ** All companies named in this article are included for reference and should not be considered investment advice or direction. **

    Investment involves risks, including the loss of capital.

    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date.

    There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document.

     

    Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.

     

    Are you an IFA or other Professional Investor ?

    Are you a financial advisor, institutional, or other professional investor?

    This section is for professional investors only. You need to confirm that you have the required investment knowledge and experience to view this content. This includes understanding the risks associated with investment products, and any other required qualifications according to the rules of your jurisdiction.