In Reinventing Globalization Part I, we demonstrated that global supply chains are being overhauled to reduce vulnerabilities and to restrict Chinese imports of “dual-use” products. This is especially affecting energy and tech (particularly semiconductors). As globalization retreats, we expect Chinese equities to underperform. Many U.S. multinational corporations (MNCs) will also take a hit as exports to China have frequently accounted for 40% of their sales growth over the last decade.

Part II of the series shows that deglobalization implies a regime change, with trend increases in capex and the labor share, as well as a higher cost of capital, lower potential growth and greater government involvement in the economy.

Download the White Paper

Epoch Investment Partners (TD Epoch) Epoch

Epoch Investment Partners (TD Epoch) manages a variety of investment strategies with different investment objectives, but they share a common philosophy centered on the belief that the generation and allocation of free cash flow represents the best predictor of shareholder return.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.