There is much talk about deglobalization – sometimes prematurely. Global trade volume is not shrinking, nor is China's share of world trade. On the contrary, it is growing, albeit slower than in the past. Trade destinations are also changing, creating new corridors. National security priorities lead to shifts in trade flows. The US and China are moving away from each other in trade. For instance, the US now imports as much from Mexico as from China. In turn, China is exporting more to emerging markets. New trade corridors have emerged.

It is more of a geo-fragmentation, expressing a deliberate risk reduction from a Western perspective by reducing dependencies on China. New trade restrictions mainly focus on raw materials and advanced technologies, especially in the semiconductor sector. Products in these areas are increasingly subject to production and export restrictions justified by national security interests in regional economic areas.

The attempt to reduce dependencies on states with a different political orientation aims to strengthen national security and secure supply chains. At the same time, it is also protectionism.

Yes, Mexico and India, for example, are winners because they do not position themselves on one side and maintain connections with everyone. Production processes also shift in connector economies like Poland and Morocco.

European companies are currently relocating part of their production to Asia for cost and geopolitical reasons. The US is withdrawing from China in the technology sectors. All countries want to diversify. Therefore, trends like "Friendshoring" and "Reshoring" exist. However, this is associated with high economic costs. The technology conflict alone costs about 5% of global GDP due to restrictions. Friendshoring alone has the potential to reduce economic output by around 1.5%.

In any case, the restrictions are not always feasible. An example is battery cells. Anyone wanting to produce electric cars subsidized by the government in the US or Europe will not be able to do so without battery cells from China because there are not enough in the West. That's why the EU has postponed its planned tariffs on electric cars from the UK by three years. It will take at least that long for enough battery cells to be produced in Europe to meet demand. China still has a quasi-monopoly on battery cells, having built a monopoly on rare earth refining over the past 30 years and dominating the supply chain for electric vehicles. It will take five to seven years for that to change.

There are voices that consider de-dollarization a myth. However, emerging markets indeed hold fewer dollars and rely more on gold reserves. Around 20% of commodity trades are no longer settled in dollars. Not too long ago, all of these transactions were settled in dollars. Various sanctions – including those against Russia – now lead to an increasing portion of commodity trades taking place in yuan. While the dollar remains unquestioned as a reserve currency, China has become the most important trading partner for 120 countries in the world.

I would rather say that the emerging markets have built up stronger relationships, but also dependencies, with China.

The real estate market constitutes a quarter of GDP, and it is now under massive pressure. In addition, domestic consumption is weak. To strengthen the real estate sector and consumption, China has pursued an expansive fiscal policy, resulting in China's total debt rising to 282% of GDP. Furthermore, the country's transition from an emerging market to an industrialized country has been hindered by significant capital outflows in the last two years. This is also challenging.

No, I don't think so. I do not see a systemic risk to the financial sector originating from the commercial real estate sector – neither in China nor globally. However, the real estate crisis is a major problem for the Chinese economy, especially concerning housing affordability.

Cheap gas from Russia and exports to China have significantly influenced the German economy until recently. The former has disappeared, and trade relations with China are tense. Moreover, all of Europe faces a growth problem due to a decline in consumption. For Germany and the Eurozone, it will be crucial for consumption to pick up again. Otherwise, economic growth will remain weak.

Joyce Chang serves as the Global Head of Research and Managing Director at J.P. Morgan, making her the highest-ranking economist at the largest bank in the US by total assets. Her areas of expertise include emerging markets and geopolitical developments. Before joining J.P. Morgan in 1999, she worked for Merrill Lynch and Salomon Brothers. Additionally, she is involved in promoting transatlantic relations through her engagement with the German Marshall Fund.