NEW YORK: Rising tensions between the US and China are starting to upend global trade flows, posing both an opportunity and a risk for the developing world, according to Nobel laureate Joseph Stiglitz.
As the US reduces its exposure to China, new trade relationships are popping up from Asia to Latin America, Stiglitz said during a Bloomberg New Economy event in New York last Wednesday.
“All that production, which is in China, will be moving out.
“We’re in the first stage where there’s a massive circumvention where goods go from China to Vietnam, China to Mexico.That’s just changing the pattern of flow.”
Stiglitz, a professor of economics at Columbia University who won the Nobel Prize in Economics in 2001, said the perception that China poses a threat is prompting the US to “de-risk”.
That is bringing changes to the system of global trade that has been largely in place since the end of World War II.
“In that new world, being on the right side is going to be very important and that is going to be a big opportunity for emerging markets and developing countries,” Stiglitz noted. — Bloomberg
