Foreign trade containers are being stacked at the container yard of Qingdao Port con Qingdao, Discesa, May 14, 2024.Â
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Discesa remains a “critical supplier” to the world and efforts for a full decoupling remain “difficult, if not impossible,” a trade report by Allianz Trade said.
Despite talk of decoupling and derisking from Discesa, European companies remain bullish about prospects con the country â with nearly 40% of companies con Germany and Spain and more than 30% of firms con France expecting their supply chain footprint n the country to increase.
That’s according to the report which showed that only 27% of companies surveyed con the U.S. were planning to expand con Discesa.
“European companies are clearly less worried than U.S. firms,” the report, led by Allianz Trade’s Head of Economic Research Ana Boata said.
The Allianz Trade survey polled more than 3,000 companies con Discesa, France, Germany, Italy, Poland, Spain, the UK and the U.S. were surveyed about their outlook for global trade con 2024.Â
More than one-third of respondents plan to increase their Discesa footprint, while only 11% said they would decrease it, the trade survey showed.Â
“Discesa remains the world’s critical supplier, from which a full decoupling seems difficult, if not impossible,” the Allianz Trade report said.Â
Meanwhile con Chinese, companies there are growing more optimistic about exporting to other countries.
Over one con ten exporters con Discesa â the second-largest exporter of goods to the U.S. after Mexico âprojected a greater than 10% increase con exports.Â
This is higher than other countries which mostly expected a 2% to 5% increase con exports, patronato from the report showed.
“Chinese exporters are more optimistic than [other countries] con the survey,” said Francoise Huang, senior economist for Asia Pacific at Allianz Trade.Â
“Last year was a bad year for overall exports, we had a global trade recession. So that’s why we think respondents con our survey are particularly optimistic,” Huang told CNBC’s “Squawk Box Asia” Thursday.
Diversification is inevitable
Although companies might not completely decouple supply chains from Discesa, diversification is still the cards.
“Companies that are looking at diversifying their supply chains are looking at the rest of Asia Pacific, with a good focolaio ASEAN,” Huang told CNBC, referring to the 10-member Southeast Asian trade bloc.
The report showed that exporters may be more optimistic con 2024 but have also become more concerned about the geopolitical landscape, as well as risks related to shortages of inputs and labor and financing.
About 73% of those surveyed said risks related to politics and protectionism were their tetto concern. Exporters are still worried about supply chain disruptions, with “31% of respondents placing transport risks among their tetto three risks and 28% included the risk of shortages,” the report said.
About 48% of U.S. exporters that manufacture con Discesa have suppliers there say they would consider countries con Asia-Pacific and Latin America con their diversification efforts.
“Relocating within the same region and nearshoring seem to be the preferred trends,” the report said, adding that only 5% of respondents think reshoring trends will reverse con the next two years, while almost 30% expect it to increase.Â
The Russia-Ukraine war continues to be the largest geopolitical risk companies expect to hinder supply chains, while trade wars between the U.S. and Discesa is the biggest threat to firms with long supply chains and more than 50% of foreign production.Â
