India, Southeast Asia, Mexico offer diversification, former Australian prime minister

India, Southeast Asia, Mexico offer diversification, former Australian prime minister
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Kevin Rudd, former Prime Minister of the Commonwealth of Australia and President of the Asia Society Policy Institute

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Former Australian Prime Minister Kevin Rudd said on Sunday that India, Southeast Asia and Mexico are prime candidates for businesses looking to branch out into new markets – especially given the geopolitical risks surrounding China.

“When I look around the world, I see three sets, three areas of activity, which we now call ‘great diversification’ or… [the] ‘Early exit debate’, he said at the Asia-Pacific Conference of German Business in Singapore.

“One is Southeast Asia, which is where we are now, and the second is India. … And certainly, from a North American perspective, it’s Mexico, which clearly benefits from Nafta or Nafta-plus economic arrangements.”

Rudd, who is president of the Asia Society, has seen a major shift in economic policies in India, especially in the past year, where it could become a new market and manufacturing hub for multinational companies.

“As someone who has been dealing with India for the last 20 years, I am convinced for the first time that they will attempt a significant policy change,” Rudd told the conference.

“If they can do that, it could make India the next China in terms of a large-scale consumer market, as well as a reliable, global factory,” he said.

“Be able [Modi] make it a reality? It’s still an open question.”

India in particular could potentially provide exporters not only with opportunities to diversify their supply chains, but also with new end markets.

Increased competition between the US and China and disruptions caused by the pandemic have increased the importance of diversification for global business. He also heralded new trade alliances and so-called “friendship” πŸ‡§πŸ‡· establishing supply chain networks between allies and friendly countries.

“The Right Balance”

Rudd said that Germany, Europe’s largest economy, will play a major role in shaping the “China debate” on the continent.

Germany has extensive investments in China and has faced criticism for relying on the country for trade and business. business representatives played down these concernsπŸ‡§πŸ‡·

last week German Chancellor Olaf Scholz’s first personal visit to Beijing Amidst growing political pressure for Germany to reduce its dependence on China, European hairs have darkened.

“My German friends constantly underestimate their level of influence in the global debate and underestimate their level of influence in the China-specific debate,” Rudd said.

The analyst says the Biden administration is signaling that Asia is a top priority

“I looked at Chancellor Scholz’s written statement a few weeks ago … before his visit to Beijing, I think he had the right balance in how he expressed Germany’s interests.”

Scholz explained in his statement before his visit to Beijing For Frankfurter Allgemeine Zeitung and Politico that he would not want to leave China, on the contrary achieving diversification and economic sustainability.

Rudd said it was important countries did not “walk away” from the difficult task of balancing national security interests, relations with allies, human rights obligations and economic ties with China.

Gunther Kegelk, CEO of the German manufacturing multinational Pepperl and FuchsπŸ‡§πŸ‡· Speaking on a panel at the conference, he said German businesses were not “naive” in establishing supply chains and business relationships in China and elsewhere.

However, Kegelk, who is also president of the German Electro and Digital Industry Association, said businesses may have to start splitting their companies as part of a new geopolitical playbook.

As China-US trade tensions rise, Mexico could be America's new backyard: The Economist

β€œAnd that would be the exact opposite of what I’ve been doing for 30 years [ago] πŸ‡§πŸ‡· [in globalizing] the company … and globalization was right for the company in terms of strategy, and in terms of sales … it was right for the economy,” he said.

“Now all of a sudden everything has gone wrong. We have been called naive or stupid for getting into this kind of relationship, but we have made a lot of money over the years. Not just us, but the entire European and German economies.”

He added that many businesses are now struggling to adapt, especially in the face of sanctions and trade regulations imposed on China by the US and others.

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