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Globalism 2.0.  Episode  17:    All In On Mexico…  (Another ChinaPat presentation) The end of the story: If your supply chain / manufacturing is in China and you are planning to someday, definitely take a serious look at alternatives - then this is your day. Mexico is the default move for “near-shoring”. The no-brainer part ends there, though.   You have a lot of decisions to make and many, many new things to figure out.  Mexico is the classic "fast or cheap" type of economy.   You're running out of fast. In this episode: All in on Mexico, but… The good news, the bad news, and the potential for a China presence. You are on your own. If you learned about China from expensed visits to the Canton Fair (4 Seasons), then you may be in a for a surprise. But as always in Mexico – that’s OUTSIDE OF MEXICO CITY.  (You’ll be hearing that a lot.)   But if you were early enough to China to have enjoyed some adventure business travel, then you may be in luck. Time is NOT on your side. The big MNCs are already here, doing manufacturing in a big way up north. No BRI deals for Mexico (the reason might surprise you), but there will definitely be a China Inc. presence in the neighborhood.  

Protectionism Gets Ugly 1. Food protectionism. Remember – for every natural problem there will be a bureaucratic response that is potentially more dangerous and damaging.  Check your supply chain for vulnerabilities. 2. US prestige in no longer a question. It is falling.  Snubs from the South, confusion in Asia…  front line decision-makers from the US have to prepare for the era of No Soft Power.  3. BEA in Mexico. Let’s talk about CRIME. Types of crime Crime and the front line decision-maker How YOU see crime vs. how MEXICANS see crime (in Mexico)

Globalism 2.0 Episode 15. Governments and Corporations Unite Against Consumers!  Saying the quiet parts about STATISM out loud.  Also: BEA on Mexico – STEEPLE Analysis This week Globalism2.0 looks at STATISM – the blurring of lines between states and corporations. Everyone’s doing it – but the US approach and Chinese approach LOOK different in the formative stages. End of the story – Statist actors from all over will get along just fine. In this episode: Comparing US and Chinese Statist behavior. Chinese actors are directed by the Party, while US policymakers and bureaucrats take their cues from corporate strategists. We’ll look at Cosco Shipping and Amazon as cases. Will the US disengage from China? Yes and No. Consumers will decouple – and pay higher prices for less variety as a result.  US-based MNCs (and those with good global networks) will NOT decouple (or even slow down their China investments). 360 Degree Analysis of Mexico. This week we continue our BEA (Business Environment Analysis), using Mexico as our case study. We introduce the STEEPLE framework as a simple tool for organizing research (and coordinating teams). 

This week we look at 2 summits between the US and leaders of key emerging markets – ASEAN and LatAm.  These should both be slam dunks, but as we’ll see the Biden Admin is encountering resistance. Business culture – the key challenge to building profitable, durable long term business relationships. Bad economics has become good politics – which means you are on your own. No favorable policies, no answer to Chinese offers, no government boosts from new agreements or treaties. Relationships in Mexico are possible – but it is work, and if you are from the US, you’ve got to clear some headwinds. China is – and always will be – in the background.  

Introduction to BEA (biz environment analysis).  The case is Mexico.  The assignment - build your Information Plan about Mexican business & culture. To help us build our Information Plan about a new culture, I’ve prepared a simple quiz for ChinaPats about Mexico business. 3 points for each phrase you can correctly identity or define. 2 bonus points for the China analog or corresponding issue in China. 1.Port of Manzanillo (Mexico) 2.Maquiladora   3.Shelter Company / Shelter Arrangement 4.IMMEX   5.E.E.U.U 6.North American   7.AMLO  8.Morena Party 9.T-MEC  10.TIPAT 11.CBX 12.Litio  13.CFE  14.La Iniciativa de la Franja y la Ruta 15.Exploiter  

You can take your SUPPLY CHAIN out of China, but you can’t take CHINA out of your SUPPLY CHAIN The discussion is no longer about IF you should shift your supply chain out of China/Asia, but HOW? Mexico is your first stop if you are exploring options in LAC – Latin America / Caribbean. China Inc. is already busy in LatAm, so you may keep some old contacts – and some of the same old problems. Mexico and LatAm are much more DIY than China was – so it’s unwise to put off getting started with your investigation and planning. #globalism2

1. Spheres of Influence are Re-forming The anti-Russia efforts have been led by Europe and the US. Former colonies (Africa, SE Asia, India, etc.) are showing less enthusiasm for increasing sanctions. Old alliances are still holding together in some cases, but much of the world is in play. US decision-makers (you) will face the challenges from a persistent America First approach. 2. Are we already in Economic Word War 1? US Treasury is actively pushing Russia into default. Russia loses MFN status. New investments in Russia are ILLEGAL for US & Euros 3.LatAm is the place to be – and everyone knows it but you. Well – not really. But CrunchBase is reporting that LatAm was the #1 recipient of venture cap funds in 2021. Mattel is the latest MNC to announce a big investment in Mexican production capacity. China sees. LAC BRI investment has been growing significantly. Peru instituting new taxes to make sure domestic producers aren't making windfall profits. In other words, it's different here. Tread carefully – but make your move.   

Globalism 2.0  Ep 10:  Is Globalism dead?   For now. 1.No more normal.  Negotiations in Ukraine are just a new front in the ongoing war.  The international coalition supporting Ukraine isn’t quite as comprehensive as we once thought.  India, LatAm, MENA, and Africa are all in play. 2.Dollar dominance under threat?  Yes…but the Yuan isn’t gaining.  Cryptos & baskets of “boring” national currencies (think Canada, Finland, etc.) are growing.  Spoiler alert:  Central banks like transparency and stability. 3.What about China?  The REAL sanction package is going to be aimed at China.  This was always the plan – since 2018.  Red states – and those that want to run them – see China as the new “holy war”.  Russia is practically an old buddy to the politicians writing anti-China rules (on BOTH sides of the aisle).

1. The Chain of Disruption – the slow moving train wreck of sanctions & logistics breakdowns  - that is eating your supply chain. The new scarcities: food, fuel, and materials. Case Study: Fertilizer and the coming famine 2. China is Next for Sanctions The Ukraine is just a distraction from the “real” competition -- CHINA. Republicans will prep for 2024 elections with strong anti-China rhetoric… and sanctions. Potential for military conflicts should NOT be ignored… 3. Meanwhile, in other emerging economies. LatAm – exporting criminals to Silicon Valley. Venezuela and Guyana heat up. Africa - Zambia rebelling against China (for now) Mideast & India like Putin and PetroYuan.

1. China Wins the War -- by doing nothing.   The Chinese have a concept known as Wu Wei - to do by not doing (or to let things happen according to nature).  Trying to pressure the Chinese side to take specific action is a sure-fire way to make them dig in and wait for developments to become more clear.   The newest MAGA problem. We’re winning the war, losing the peace. 2. Guns, Sanctions, Alliances. In the old days, infantries grabbed territory, sanctions grabbed headlines.  This round was different though… and China should be nervous. 3. Meanwhile in Latin America, MENA, and other dev markets... Columbia is upgraded to extra special BFF while China sets its sites on LatAm.  Saudi and India look at Yuan denominate petro trade. 

In this episode, we look out into the distant future (1 year) and test a few possible scenarios that may 1. Post Ukraine World. Potemkin Putin or Angry Wounded Bear?  Russia may force a regime change in Kiev,  but the fighting will continue .  One possible scenario is that Russia will be broke, Ukraine butchered – and the rest of Eastern Europe on high alert. 2. China Russia, and a World United. Everyone is terrified of a potential Russia-China axis, but when China says “Russia is a strategic partner” –  it’s China’s strategy.  Big talk, but so far Russia has gotten more support from the GOP’s Putin wing than they have from Xi.   China’s strategy includes grain, energy, pipes, and access for BRI projects. 3. Statist battle: How many Big Macs equal a T-14?  Official sanctions were quick, unified, severe – but expected.   But the embargo and departure of western suppliers (where the Russian population knows very little about the war).  Not just dual use technology -  beloved soft-power brands like McDonalds, Coke ,  Apple and lots more are publicly moving out of Russia.  And then of course, there’s SWIFT.

Globalism 2.0.  Episode 6:  When Did China Know?  He Says, Xi Says. In this episode: Are China and Russia still an item? Yes, but it’s on the DL now. China will buy grain and energy – but no more public scenes. Cybersecurity and YOU. Congratulations. You (and your company’s network) and innocent bystanders. Will fear of cyberattack kill  the beloved Work From Home? Mexico gets a real union. For decades, US corporate bosses have manipulated Mexican labor laws to exploit workers – but now that may be coming to an end. Before you start cheering… where does you company produce its parts?