Yes…
The Long Hard Road to Decoupling from China
ANDREW A. MICHTA
It’s by now beyond clear that China is no partner to the United States. A difficult, but necessary, separation lies ahead.
The era of globalization may finally be coming to an end. The Wuhan Virus and the attendant misery that the Chinese communist state has unleashed upon the world (very much including its own people) has laid bare a core structural flaw in the assumptions underpinning globalization. It turns out that the radical interweaving of markets—which was supposed to lead to the “complex interdependence” that IR theorists have been predicting for the better part of the century would lead to an increase in global stability as countries’ fates are proven to be dependent on each other’s fortunes—has instead created an inherently fragile and teetering structure that is exacerbating uncertainty in a time of crisis.
That this has turned out to be so should not be surprising. The logic that has driven globalized supply chains has all but eliminated redundancies across the world in the pursuit of efficiency. That efficiency has been found by locating links of the supply chain in places where labor costs have been low. In theory, anyway, this should not have been problematic: as one country grew its economy and ascended out of poverty, its low-wage sector would get outcompeted by other poor countries, by which it could be replaced in the supply chain. Similarly, by this logic, if robots become permanently competitive with low-skilled workers, so be it. A more efficient way of producing something is always favorable in this way of thinking.
Such thinking largely ignores geopolitics. By striving to “flatten” the world (in Thomas Friedman’s memorable phrase) into a single, borderless entity in pursuit of nothing but profit and prosperity, this worldview has created huge blind spots. For example, it was powerless to predict that China would build on its early advantage in sheer numbers of low-skilled workers to lock in a dominant and increasingly powerful position for itself in global supply chains. Economies of scale played their part, as did the complementarity of the various manufacturing sectors the country strategically developed, not to mention China’s bullying and corrupting practices. The end result was that the costs of shifting to poorer countries would be unappetizing to corporate supply chain managers. Worse still, such thinking could not account for the fact that behind the scores of successful companies lay a monolithic, totalitarian, nationalist entity with a vision for restoring China’s role in the world: the Chinese Communist Party (CCP).
[…]
We need to start re-shoring our manufacturing and investing in the regional diffusion of supply chains. The imperative of hard decoupling from China is as strong as it’s ever been. Getting there, however, will not be easy. “Re-shoring” is itself a tidy phrase for a complicated process that will take years to bear fruit. Change will require incentives, both positive and negative, including changes to our corporate tax code, subsidies, penalties, and perhaps even concerted efforts to shame American companies into different behavior. And beyond policy, leadership will be required. All this will have to be explained and communicated to the American people. We will simply have to absorb the costs of this, even if it means prices going up for various goods that we have become accustomed to consuming cheaply.
Especially in areas critical to national security and defense, the United States must preserve a degree of autarky that will allow us, should the extreme happen, the sovereign freedom to act. Re-shoring our manufacturing will have the added benefit of eliminating the “technological bleed” that has accompanied globalization over the past 30 years.
More here.