by Terence MacNamee

The German word Verlagerung belongs to the current vocabulary of the European business world. It means moving or transfer or shifting. It is being used a lot in relation to Asia: Verlagerung nach Asien. What does this mean?

First, it means transfer of business operations to Asia. This is what is usually called in English “offshoring”. A manufacturer decides to move part of its operations to an Asian country to benefit by tax breaks and low wages. Swiss companies have an extra reason for doing this: they escape from the high-priced Swiss franc, which has put them in a situation where their customers can’t afford to buy.

But Verlagerung is also used to mean the shifting of power and wealth to Asia. In this meaning, it indicates that European and Western companies have to focus on pleasing Asian customers. The sun is rising in the East.

Western business people like to think of Asia – and China in particular – as a business opportunity: they are going to sell what they already make to a huge new market. All those millions of Chinese are just waiting to buy cars, appliances or whatever else. Americans especially see globalisation that way. American companies take what they make for the domestic market and sell it to new markets in Asia. It’s a one-way street. The American company makes more money, and the new Asian customers just adapt to the American product.

This kind of thinking is to a great extent counter-phobic. Westerners are made nervous by the increasing wealth and power of Asia. They are particularly alarmed when Asian investors and industrialists buy up Western companies. So it is comforting to think of oneself as still a “winner” who just makes money out of Asia. The party will not be over at least for another generation, so the thinking goes. Yet the ground is already moving under our feet, and we shut our eyes so as not to see.