Every time Western politicians talk about “de-risking” or “reducing dependence on China,” it’s presented as if it’s simply a matter of political will. Build a few factories, move some production, and the problem is solved.
Now someone has finally tried to put a price on it.
According to new research cited by the Financial Times, the US, Europe and the UK would need to invest an astonishing $23.6 trillion over the next 25 years just to significantly reduce their reliance on China. That’s almost $1 trillion every year,and even then, the report says there is no guarantee they could actually achieve it.
The reason is simple. China isn’t just a place that manufactures products cheaply anymore. Over decades it has built complete industrial ecosystems that combine raw materials, advanced manufacturing, engineering talent, logistics, research, software development and highly integrated supply chains. Recreating all of that isn’t something you can do simply by throwing money at the problem.
The report also warns that moving production away from China would increase manufacturing costs, push up inflation and require huge additional investments in factories, infrastructure and skilled workers. In other words, consumers would end up paying the bill.
Whether you agree with the politics or not, the economics are becoming much harder to ignore. The narrative has always been that decoupling would be difficult. This report suggests it could also be one of the most expensive industrial projects in modern history, and even after spending $23.6 trillion, there is still no certainty that China could be replaced.
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