Good summary.....but you have to be careful in terms of cause and effect. The companies involved are all competing in global industries and making decisions based on their business models, and are not/not being directed to do certain investments from Beijing. Of course Beijing is cautioning Chinese companies on investments in India and steering EV makers toward countries in Europe that opposed tariffs, this is what governments do. The interaction between Chinese government preferences and company business models is the really interesting part of the story here, sometimes they align, often they do not....
Very interesting data! One thing to have in mind is that many European countries DON'T want Chinese investors in theses sectors (EV, batteries) as they're making efforts to support their own industry.
“Beijing is encouraging Chinese companies to build plants in “friendly” countries while discouraging them from investing in others” … is this “中国特色友岸外包”?
Sharp analysis, Kyle. The contrast between Brazil (The Carrot) and India (The Stick) is the defining signal.
I view this less as 'diplomacy' and more as Strategic Embedding. By planting factories in Hungary or Mexico, China moves beyond simple trade; they are grafting their industrial ecosystem onto the host economy to create a Structural Lock-in.
Wake up babe! Kyle Chan just dropped another banger. Keep up the good work, and thanks for your insightful article.
Good summary.....but you have to be careful in terms of cause and effect. The companies involved are all competing in global industries and making decisions based on their business models, and are not/not being directed to do certain investments from Beijing. Of course Beijing is cautioning Chinese companies on investments in India and steering EV makers toward countries in Europe that opposed tariffs, this is what governments do. The interaction between Chinese government preferences and company business models is the really interesting part of the story here, sometimes they align, often they do not....
interesting analysis!
Very interesting data! One thing to have in mind is that many European countries DON'T want Chinese investors in theses sectors (EV, batteries) as they're making efforts to support their own industry.
I am so glad this is the first article I read on substack today ! What a banger !
“Beijing is encouraging Chinese companies to build plants in “friendly” countries while discouraging them from investing in others” … is this “中国特色友岸外包”?
"Chinese firms are prioritizing their EV and battery investments in EU countries that are more friendly to China"
What is a point of investing in unfriendly country? :)
Great stuff as always Kyle.
*China has already reshaped global supply chains
Sharp analysis, Kyle. The contrast between Brazil (The Carrot) and India (The Stick) is the defining signal.
I view this less as 'diplomacy' and more as Strategic Embedding. By planting factories in Hungary or Mexico, China moves beyond simple trade; they are grafting their industrial ecosystem onto the host economy to create a Structural Lock-in.
The uncomfortable truth for policymakers: Tariffs are obsolete against this model. You simply cannot sanction a factory that employs your own voters.[https://chinarbitrageur.substack.com/p/the-great-re-routing-why-your-made]