Dear Members and Friends
The year 2022 is well on its way to being
remembered for the many changes it brought about that will permanently alter
the course of history and the economy.
On the one hand, Europe has learned to deal
with the corona virus and is more relaxed about the colder days of winter
2022/23. On the other hand, the war in Ukraine has dramatically changed the
nature of our security in Europe, as well as the source of the energy we use as
citizens, consumers, and as an economy.
As the saying goes, small changes over
decades can make way for changes that will have decades-long consequences in a
very short time. In the future, gas supply will no longer be seen as a
pipeline-bound resource, but as a globally traded and transported commodity.
Similar to what happened with oil a century ago.
The same is true of the so-called
"peace dividend," government budgets will be altered for many years
to come, and the perception of the concept of "security and trust"
has changed in the minds of many citizens. And there are many other things that
will come to mind. For example, a World Cup in November, the month we usually
assign to the start of winter sports activities.
The way we see the economy in China has
also changed. While coping with the zero-covid policy and the disruptions
caused by the dynamic shutdowns, economic players in China have shown
resilience and supply chain disruptions are fewer than in 2020 and 2021. This
is the result of several measures, China +1 being just one of them.
However, we see that stress is taking its
toll on workers and citizens in China. There is a risk that China's image as a
reliable manufacturing base will falter as workers leave the workplace and
management is unable to ensure a stable and predictable work environment and
production schedule.
Considering that the current Omicron
variant may overwhelm China's healthcare infrastructure, this raises
uncomfortable questions. For example, why the number of intensive care units
has not been increased in the last three years, why the high youth unemployment
rate has not been channeled into education and training of health workers and
medical personnel to address the severe shortage, and why the vaccination rate
among the elderly and weaker Chinese citizens has not been increased through
motivational measures and communication.
It is therefore to be expected that the new
leadership of the Chinese government will have to take measures to protect its
citizens while maintaining the highest possible level of economic activity. A
situation that will challenge the most capable government bodies around the
world.
In this situation, it is crucial to closely
monitor decisions at the national and provincial levels to understand the
impact on your business activities and interests in and with China. There will
be actions that will relax current policies and measures that will make it more
difficult to maintain business.
As said, 2022 will be a year to remember
with long-lasting consequences. Therefore, we have the same advice for December
as for October and November: pause, observe, conclude, and act.
The next newsletter will be published in January
2023. Until then, we wish you a peaceful, healthy, and prosperous festive
season.
Kind regards
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