As the acute bottlenecks in supply chains resolve in the long-term, some structural issues may remain, creating both opportunities and challenges for policymakers, industry leaders, and investors.----- Transcript -----Michael Zezas Welcome to Thoughts on the Market. I'm Michael Zezas, head of public policy research and municipal strategy for Morgan Stanley.Daniel Blake And I'm Daniel Blake, equity strategist covering Asia and emerging markets.Michael Zezas And on part two of this special edition of the podcast. We'll be assessing the long term restructuring of global supply chains and how this transition may impact investors. It's Wednesday, January 12th at 9 a.m. in New York.Daniel Blake And it's 10:00 p.m. in Hong Kong.Michael Zezas So, Daniel, we discussed the short and medium term for supply chains, but as we broaden out our horizon, which challenges are temporary and which are more structural?Daniel Blake We do think there are structural challenges that are emerging and have been present for some time, but have been exacerbated by the COVID pandemic and by this surge in demand that we're seeing and a panic about ordering. So we are seeing them most acute in areas of transportation where we don't expect a return to pre-COVID levels of freight rates or indeed lead times. We also see more acute pressures persisting in parts of the leading edge supply chain in semiconductors, as well as in areas of restructuring around decarbonization, for example, in EV materials and the battery supply chain. But more temporary areas are those that have been subject to short-term production shortfalls and areas where we are seeing demand that has been pulled forward in some regards and where we are also seeing the channel being restocked in areas that were not necessarily production disrupted. And so this in the tech space, for example, is more acute in some consumer electronics categories as opposed to autos, where we do have very lean inventory positions and it will take longer to rebuild.Daniel Blake But in the short run, we do think what will be important to watch will be the development of new COVID variants and the responses from policymakers and public health officials to those and the extent to which production and distribution can be managed in the context of those challenges. So really, I think a lot comes back to the public policy decision. So what are you seeing and tracking most closely from here?Michael Zezas Yeah, I think it's important to focus on the choices made by policymakers globally. You and I have talked about and reported on this concept of a multi-polar world. This idea that there are multiple economic power poles and that each of them might be pursuing somewhat different strategies when it comes to trade rules, tech standards, supply chain standards, et cetera. So I think the US-China dynamic is a great example of this. Obviously, over the last several years, the U.S. and China have shifted to a model where they define for themselves what they think is in their best economic and national security interest and in order to promote those interests, adopt a set of policies that are both defensive and offensive. So with the U.S., for example, there were tariff increases in 2018 and 2019. Since then, they have mostly shifted to raising non-tariff barriers like export restriction controls and increasingly over the last year have also been pivoting towards offensive tactics. So promoting legislation to invest in reshoring like the US ICA. So what this means then is that companies that had been benefiting from globalization and access to end markets and production processes in the U.S. and China now may need to recalibrate and take on new costs when they're transitioning their value chain for these conditions of kind of new barriers, new frictions in commerce between the U.S. and China.Daniel Blake And take us through the corporate perspective. What are you seeing and how should we think about the corporate response to these