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The systematic decoupling of the US and Chinese economies will cost trillions of dollars and cause problems elsewhere in the world, including Europe. Poland, on the other hand, may become an alternative to China in the production sector, which should have a positive impact on GDP.
The costs of the ongoing “divorce” of the US and Chinese economies could range from just under $15 to over $45 trillion by 2030. – estimates Kearney consulting company.
It is about the systematic separation of the two economies at all levels – from production to technological know-how. Asia and Australia will be hardest hit, but the Americas and Europe will also be hit hard.
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China without economic brakes. “Unfortunately, we are dealing with the Cold War”
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The trade war between the US and China
The trade war between the US and China has been escalating for several years.
According to experts from the Warsaw Institute, a Polish think tank dealing with geopolitics, it is a manifestation of the systemic competition of both economies for the position of superpower, which will dominate the first half of the 21st century.
The root of this conflict dates back to the presidency of Donald Trump
who came to power in 2016 carrying slogans on election banners: Make America Great Again and America First. During the presidential campaign, Trump accused China of draining the American economy, and when he took office, his administration
began imposing tariffs and other trade barriers on China.
The Chinese government, in turn, accused the Trump administration of engaging in protectionism.
Current President Joe Biden continues the tough US policy towards China.
The pursuit of independence from the Chinese economy, which supplies almost the entire world with goods, is not easy.
The situation was further complicated first by the pandemic and then by the war in Ukraine. All of this disrupted supply chains and caused major disruptions to global trade.
– Thinking about the separation of the US or Europe from China is nineteenth-century thinking.
In the meantime, the economy has globalized in such a way that we are dealing with one global manufacturing-production-service organism that is so deeply interconnected that
its rupture would have the dimension of a world cataclysm
– said money.pl in November last year Krzysztof Domarecki, the founder and main shareholder of the Selena Group.
The US-China conflict and the rest of the world
Experts, however, have no doubts that the separation of the world’s two largest economies will continue. According to Kearney analysts, this process seems unstoppable and can take place in three variants: from limited, through moderate, to full, in which, apart from economic costs, there is a risk of serious social and even military tensions.
Depending on the adopted variant, the losses for the European economy alone in the perspective of 2030 may even reach the value corresponding to the annual GDP for the entire Western Europe – says Krystian Kamyk, managing partner from the Polish branch of Kearney.
According to Kamyk, the likely consequence of a possible tightening of “decoupling” (a term popularized during the presidency of Donald Trump)
will be a decrease in trade volumes and a weakening of economic growth in developing countries, including Poland.
– This will mean a deterioration in the financial results of companies, as well as an increase in production costs, as companies will be forced to switch to less efficient supply chains. At last
this can lead to higher prices, inflation and interest rates
Kamik explains.
According to experts, ignoring the change that is taking place in US-Chinese relations can mean serious danger, especially for businesses operating on an international scale.
Polish perspective
The Polish economy is not in a lost position. Some markets could benefit from forced supply chain shifting and diversification, according to Kearney’s analysis.
Poland has the potential to become an attractive alternative to China in the manufacturing sector
among others thanks to an open economy and high positions in labor productivity rankings.
Furthermore, Kearney’s analysis states that
a relatively good business environment and a large internal market will favor Poland’s positioning as a partner in the case of forced diversification of supply chains outside Asia.
Disturbed chains will most likely have a negative impact on export-oriented sectors, such as the agri-food industry, where Poland is one of the export leaders among EU countries (~6% of EU exports).
–
The potential deterioration of relations between the US and China should have a positive impact on the value of Polish GDP, due to its structure
says Kamik.
As the expert explains, the Polish economy can benefit from the change in the global paradigm thanks to the development of the production sector, improving the position of exporters (due to the depreciation of the currency). As well as taking advantage of a strong position in transport (especially road transport, which is important in the event of a change in the supply chain and shifting the production of European companies from Asia to Central and Eastern Europe).
Karolina Wysota, money.pl journalist
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Source: money.pl
