Mideast War Won’t Shut Down the Silicon Road
The region's trade corridor with Asia is getting more busy all the time, whatever happens in geopolitics.
The picks and shovels for the gold rush will come from Asian firms.
Photographer: Maya Anwar/BloombergThe big theme in Asian supply chains over the past decade has been relocation. Entire industries have sought to pare their reliance on China by shifting manufacturing to other low-cost destinations like Vietnam and India. Japanese carmakers and Indian pharmaceutical firms have chosen Mexico to be closer to American demand. More recently, however, a new route is emerging — from Asia to the Middle East.
Speculation that the US is on the verge of joining Israel’s attack on Iran may unsettle business leaders’ current plans and delay activity along the corridor. However, as long as hostilities don’t spiral into a catastrophic event, such as the closing of the all-important Strait of Hormuz to shipping, they are unlikely to derail the economic case for a reprisal of the historic Silk Road.