Anti-globalization is a new political force in the West. The United States is already shifting away from globalization. Europe is moving in that direction too. The global environment is becoming more and more challenging for China. On the other hand, China’s economic cycle is way overextended and full of problems. In 2017, the US will put pressure on China to appreciate the currency, open door to US goods, and open new industries to US investment. The US wants symmetry in the bilateral relationship but China’s political system is based on protecting the CCP’s vested interests. This will be a huge struggle to accommodate.
At the same time, China is the largest trading partner for all major East Asian economies. Most of the trade -- especially with Japan, Korea and Taiwan -- is in products for third markets, like the US and EU. Also, one third of China's imports are equipment, mostly for export factories. If China exports to the US are blocked, there will be a huge impact on Japan, Korea, and Taiwan. Southeast Asia mostly exports commodities and agricultural goods to China, so the impact there is more limited. Indonesia has the largest market share in China's foodstuff imports, and Thailand is the largest tourism market for China, so obviously, there is more resilience there.