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China: the world is changing…fast

 Did you know that flight to and from China only recovered to 50% of the pre pandemic, and more importantly flights between China and the US are at less than 10% of what they were prior to the pandemic.

What that means is the US executive who were in the past flying to China to either contract work or supervise operations are no longer doing so, the long term implication for China is catastrophic because the US is China’s #1 export market.  America is/was China single largest source of FDI.  

In the short term the impact is being felt right now, expanding capex by companies in their US operations and a precipitous drop in total FDI into China that translates into slower economic growth.

When will trend change?  Probably not for years to come.  The reason is that China is no longer financially attractive as a FDI destination, Americas and Vietnam (which is a small economy) are more attractive.  

CEO have not got to China for several years because of covid, the connection is broken; financially it no longer makes sense therefor to consider China.  To make it even worse Chinese leaders have been trampling all over the place and acting like a “bag of dicks” so politically China is seen negatively.  Finally, China’s energy infrastructure has been in poor shape for some time now.  

US business people have lost the interest or appetite and Ina’s political actions has made it even easier to look elsewhere.

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