The world’s factory strikes back

Economic security is driving a new era of globalization where dependencies are increasingly viewed as potential vulnerabilities. But efforts by advanced economies to diversify away from China are not happening in isolation. China is leveraging its dominance in supply chains to compete with emerging and developed economies. As supply chains begin to shift, China will make the process as costly as possible for its rivals.

Due to its industrial capabilities, cost efficiency, and comprehensive supply chain infrastructure, China will continue to shape this period of re-globalization characterized by systemic competition, writes MERICS Chief Economist Max J. Zenglein. How the country leverages its manufacturing power will matter tremendously for any diversification efforts and the global economy. You can download the analysis as a PDF here: