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For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
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IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
27 August 2020

Is it all change for global supply chains?

Partly thanks to the Covid-19 pandemic, but also to political shifts, the 25-year trend for offshoring has now stalled and that could mean a resurgence in reshoring and a reshaping of the global manufacturing map.

 

Although the future is uncertain, it seems pretty clear that a lot of companies will need to rethink their supply chains. For some emerging market countries, too, it means a change of tack and perhaps a migration away from the export-led economic model that’s been a defining feature of recent decades.

 

What this means for China is also an interesting question. Like many others, we’ve been thinking through how the global and financial architecture has begun to change in recent years. Clearly, the US has been the dominant force along with Europe – but, as China has emerged, that’s begun to evolve into this multipolar world where we have three main centres for monetary, economic and currency policy. For many countries it’s become clear that the more important trading political and economic relationship is with China; not the US. It could make for a tripolar world and we think Covid-19 could accelerate that evolution.

 

Colm McDonagh, head of emerging market fixed income, Insight Investment.

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Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.

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