Could conflict and war in Asia lead to business opportunities at home?
I’m flying to South Korea on Thursday for a wedding and it has me thinking about geopolitical relations in that region more than I otherwise would. To say I’m concerned about Russia & possible Chinese aggression while I’m in South Korea would be an understatement.
Given my luck, as soon as I land in Seoul the CCP will decide to get frisky in Taiwan and all of Asia will be on high alert.
Global war might put a damper on this wedding.
I’m a Hoosier from the corn fields of Indiana so navigating South Korea in the midst of global turmoil isn’t something I would excel at. I don’t speak the language and can’t read Korean so even finding the US Embassy would prove to be challenging.
With my travel plans forcing me to ponder the consequences of the Russia/Ukraine conflict & possible Chinese aggression in Taiwan, one thought keeps repeating in my mind; our global supply chains are incredibly connected and fragile.
How can I take advantage of that fragility?
How can I capitalize on Asian supply chain disruptions?
Think like a Greedy Capitalist
After all, I’m an entrepreneur & greedy capitalist so a supply chain breakdown could be my financial windfall if I can solve the problems a slow/disrupted supply chain creates.
I admit it is easier said than done, but to the victor goes the spoils. If someone is going to make money off a changing or interrupted supply chain, it might as well be me.
Being in a position to ramp up production of certain goods and services “IF” China goes to war in Taiwan is a risky bet, but no one ever got rich by playing it safe.
Covid Supply Disruptions
Personally, Covid was a wakeup call in understanding just how connected our supply chain is to Asian production of everyday goods. From vitamins to computer chips there wasn’t a single product that's not connected to Asia in some way. I'm not sure if any produce is sourced and produce entirely in America anymore.
What happens to the flow of goods into the western world if the Chinese do decide to go to war with us either directly or indirectly?
I highly doubt the Chinese will keep supplying us with cheap dog toys and everything else you buy on Amazon if they are also bombing Taiwan or other American allies.
Maybe the Chinese are damned if they do and damned if they don’t? They might need to keep supplying the western world with cheap goods to fund their war machine. If we stop buying stuff we don’t need from Amazon, will the Chinese be able to fund a prolonged war effort?
What kind of resources do the Chinese have tucked away and what sort of international support would they get if Americans sanctions are placed on them?
Will there be other buyers for cheap Chinese goods that are more sympathetic to their expansionist efforts? Maybe the consumerist lifestyle that has engulfed the USA will shift to some place like Singapore and they will pick up the slack if Americans quit buying Chinese.
Just because Americans quit buying Chinese doesn’t mean other countries have to follow along. We might soon find out who our friends are in that manner.
Reshoring
Someone has to make the items Americans buy and if international turmoil further shakes up the supply chain (think Covid 2.0) we could see a lot of that production come back to America.
That is, if and only if, American entrepreneurs are willing to put up the capital and effort required to ramp up production.
As a “youngish” American I would love nothing more than to see manufacturing jobs come home. Selfishly, it would create opportunities for someone like myself to expand my business and get my hands into different sectors of the economy, but it would also provide job opportunities and solidify national security.
Who wouldn’t love to get rich making T shirts or water bottles that other Americans are buying and using? None of that is made here now, but it may soon need to be.
There is a pride in making products within your local community that are being sold and used in your own country. I doubt a Chinese production employee at some random dog toy plant feels proud of his work. He has no relationship with the end consumer in any way.
My American dream would be to position myself so that my company produces products in the USA and sells them to Americans at a price where I can afford a new car and vacation home.
Products being produced and sold in America would be miraculous system to me. For most, if not all, of my life manufacturing jobs have gone overseas.
Maybe international aggression/war will turn that tide and over the next 30 years we will see those jobs come back?
This could be a generational opportunity for American entrepreneurs as long as they have the vision and position themselves to make capital expenditures.
If things do start to go south in Asia focus your attention on what products and services are disrupted first. Find a way to fix those disruptions and make a lot of money doing it.
In the meantime, wish me luck. I’ll be stuck on a plane for 15 hours with a six-month-old.
Scott Kohler