News / China could 'go it alone' – but does it really want to?

China as economic and political power

China has the capability – but lacks the desire – to “go it alone”, with its long-term goals aligned through partnership with Europe and the US, according to VP for Asia at digital forwarder Forto Eric Reuter.

He was responding to recent public discussion over whether western firms are looking to abandon China in the wake of geopolitical and supply chain risks.

“I feel there is a tension to suggest maybe China thinks it can ‘do it alone’, but this presumes it wants to,” Mr Reuter told The Loadstar.

“Remember, China has a huge domestic market – that has only increased since Covid, with waves of new tourist attractions, infrastructure and a massive electric vehicle market – and it has shown it can survive without Europe. But the thing is, it doesn’t want to, and that is why you are seeing the diversification western companies are making being reflected by Chinese companies.”

As examples, he pointed to China’s external investments in projects in Europe – such as state-run Cosco acquiring 51% of Greece’s Piraeus Port Authority – and others elsewhere round the globe.

Nor is Mr Reuter a lone voice in assessing reports of “divestment” from China as “hype” and “overblown”, but unlike others he rejects the idea of India as an escape route for western firms.

“India has a bigger population than China, but its workforce does not have the same skills, and this is in part down to different styles of government, with China’s ruling party determining a plan that will run for 50-100 years,” he said. “India’s political process of electoral democracy delays, even changes, plans and, given that local politics can intervene, the big population with different voices causes further delays.”

Despite this, he said, India was well aware of what was needed and appeared to be moving towards an economy structured around improved infrastructure, with investments in roads, rail, ports and airports which could offer alternatives.

Asked how he would explain western companies diversifying their sourcing, he noted it was not a recent phenomenon.

“This process to diversify has been occurring for the better part of 23 years, and it is not aimed at moving away from China but rather expanding and looking to complement China,” he explained.

“Take diversification to Malaysia; it has a highly skilled population, like China, but it numbers fewer than 30 million, hence it specialises, rather than competes.”

Amid all this, though, looms the Taiwan question, but Mr Reuter also questioned the reality of sabre-rattling, and said conversations he was having suggested a different approach from Beijing.

“China has a plan for Taiwan, and I think everyone is aware of this, even if not everyone agrees with it,” he said. “But, based on talks I’ve had with people in China and Taiwan, I do not see it descending into war – in large part because the domino effect would be too big.

“Instead, I think this issue will be resolved through a political solution based on talks; and these will be later rather than sooner.”

Listen to this clip from the latest Loadstar Podcast of Peter Sundara Swamickannu, head of global ocean freight product, Visy Logistics, on why replacing the world’s factory is a long-term process.