Countries from the US to Vietnam and Indonesia are all trying to present themselves as alternatives. The $53 billion Chips Act was an attempt by the White House to reclaim chip manufacturing, as is the national blueprint to build a lithium-ion battery supply chain by the end of the decade. For electronics, Vietnam has been hailed a viable option. Even Indonesia, the biggest producer of nickel, a critical component of electric vehicle batteries, wants to move up the ladder and capture the value-add from a global shift into EVs.
There’s been a lot of talk of shifting the manufacturing supply chain away from China. Other countries want to cut their dependence on the world’s biggest factory floor, wary that Beijing is wielding too much power over the global economy. Rebuilding manufacturing and replacing China, though, isn’t all that easy. Constructing highways and production lines that work like clockwork, with tightly-knit networks of suppliers, is a gargantuan task.
Over the last two decades, Beijing pampered global manufacturers with its meticulously built-up infrastructure and copious industrial supplies. The country’s hold on production processes, even in sectors it doesn’t dominate, meant it rapidly grew in importance. The debt state-owned companies took on to build highways ended up ensuring logistics and supply chains can run smoothly. China, no doubt, has a lot of economic imbalances, but its dominance in the world economy won’t change any time soon.
