China’s way forward
Excellent post from the Atlantic by James Fallow here. There are several distinctions that James highlights in the road China is carving for itself in the face of collapsed global demand. You can read the original article for the details, they are (a) China will not go the way of Soviet Union (implode) or Japan (muddle along) and (b) Disruptive innovation – China will use this time to design high value high profit margin products.
Which brings me to what my colleague JP said. He had mapped an axis of what SGP imported/exported, with what China imported/exported. Besides showing how much of SGP’s trade eventually ended in the G3 markets, it also showed that where we were in direct competition with China lay a lot in (b), those high value high profit margin products that once China gets the ‘China price’, it is very hard for anybody else to occupy that space. Where China bought what Singapore made, it was a thin slice of products and services. We are in a precarious position if we don’t plot out the future of China’s demand and how Singapore can meet it.
Likewise, what can we do for India? And for the GCC? And for the new markets of G3 post-crisis?
I thought I could wrap up the Future of Global Demand project soon, but now I see what we’ve done is the base. More work should still be done on fleshing it out. I am grateful for the work JP has done in the past few months, and inshallah God willing, what I create as the next phase of Singapore and Future of Global Demand will do it justice. Many thoughts on this…