Security News > 2023 > March > Electronics market shows US-China decoupling will hike inflation and slow growth

According to the Monetary Authority of Singapore, trade barriers between US and China have resulted in geoeconomic fragmentation and will likely result in slower global growth and higher inflation.

Speaking at the at the IMAS-Bloomberg Investment Conference on Thursday, MAS managing director Ravi Menon said tensions between the US and China have not only affected the two countries, but global trade patterns and supply chains as well.

The US and China have implemented tighter cross-border investment restrictions and stepped up domestic production of critical goods as a result, said Menon.

"These shifts are most evident in the electronics industry," said Menon, who pointed out that Vietnam has seen the largest increase in its goods' exposure to the US market.

The proposed chip alliance between the US, Taiwan, South Korea and Japan could drive away trade from countries not included in the alliance while diverting some trade from China to Vietnam, India and Mexico - all areas the MAS exec said had great potential for hosting final electronic assembly.

One study Menon drew on pegged global GDP losses at 1.2 percent for limited trade fragmentation and another at 8-12 percent in individual countries if there was a "Full technological decoupling" of the US and China.

News URL

https://go.theregister.com/feed/www.theregister.com/2023/03/10/electronics_us_china_inflation/