Rising risks of conflict between the United States and China is worrying big Tech companies who rely on hardware from China to produce their products. National security officials in Washington now predict about a 50% chance of a large scale conflict with China within the next 5 years. This would prove to be catastrophic to numerous industries that rely heavily on Chinese's manufactured goods to produce their products.
Companies are being advised to work with policy makers to help better understand the risks that such a conflict would pose on their business. These businesses are also being advised to wain off of their reliance on Chinese produced electronics. For companies who have already began sourcing materials from other countries, and companies who did not heavily rely on China in the first place, the threat is not as great. Over the course of the next few years, we will see if this threat will stay a threat or develop into something more detrimental to the American Tech Industry.
Article:
https://www.wsj.com/articles/congressional-u-s-china-commissioner-warns-of-global-tech-supply-chain-risk-ae49ad2d?mod=economy_lead_pos1
With this I wonder what the new issue will be since the violent outbreaks have been occurring overseas. It is interesting to see the predictions of that economist and the government has when it comes to our alliances with other countries. I do believe that the 5-year prediction most likely shrunk with the recent events involving Israel-Palestine and that mess.
ReplyDeleteBusinesses do have to take caution with this and with the war in general that could be starting to more involve the states.
This could definitely have major impacts on some massive sectors in the US, like electric cars. A lack of the micro processing chips would deteriorate even the largest producers like Tesla. It will be interesting to see what domestic producers do in order to prepare for a possible sudden drop in chip access.
ReplyDeleteThere is clearly a reason for alarm in spite of the congressional U.S. and China commissioner's warning over the risk to the global tech supply chain. The escalating tension between the US and China, with the expectation of a confrontation, serves as a reminder of how fragile international supply networks and trade are. I would say not only tech businesses face danger, but a number of other industries rely on products made in China.
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