India's billionaire Gautam Adani says that China will feel increasingly isolated and the foremost champion of globalization will find it hard to bounce back from a period of economic weakness.
Adani said at a conference in Singapore on Tuesday that increasing nationalism, supply chain risk mitigation and technology restrictions, as well as resistance to Beijing's huge Belt and Road initiative, would affect China's global role.
Asia's richest man said that housing and credit risks in the world's second largest economy were also drawing comparisons with what happened to the Japanese economy during the 1990 s. Adani was speaking less than a month after the business mogul became the world's third richest man, according to the Bloomberg Billionaires Index. He is the first Asian to take that spot.
The founder of the Adani Group controls companies from ports to power.
Adani is a bullish about China, but he believes that India is one of the few relatively bright spots from a political, geostrategic, and market perspective. He believes that India will become the world's third largest economy by 2030, with the largest consuming middle class the world will ever see. Some tech firms that are looking to reduce their dependence on Chinese manufacturing already see India as an attractive alternative.
Apple has started making its new iPhone 14 in India, as the tech giant wants to diversify its supply chain. The company makes the bulk of its products in China, but it has decided to start producing its latest devices in India earlier than with previous generations.
Businesses may have to move away from China because of the strict Covid restrictions, which have hurt supply chains for months now, but also because of rising tensions between Washington and Beijing over Taiwan.
Two of America's top chipmakers were ordered by the US government to stop selling high-performance chips to China earlier this month. Last week, leaders of America's biggest banks said they could exit China if it ever attacks Taiwan.
Adani also mentioned the challenges facing the United Kingdom, and countries in the European Union because of the war in Ukraine and Brexit.
He said that while I expect all these economies to readjust over time and bounce back, the friction of the bounce-back looks much harder this time.