The Covid-19 pandemic has made one thing absolutely clear: China is the workshop of the world. This has significant strategic and geopolitical implications. By playing its initially weak hand to perfection, China transformed its position of dependence into one of dominance during the last several decades. The highly touted interdependence of countries in manufacturing processes is, in fact, asymmetrical. The United States and Europe are reliant on China for inputs of intermediate goods used for manufacturing output; China is not reliant on either. This asymmetry is intensifying. China’s value-add in manufacturing has been increasing, while its use of U.S. inputs is decreasing
In his paper, authors Dan Breznitz and David Adler consider the possibilities for economic gain as a result of reshoring production in America, and set forward a practical policy agenda contemplating how to do so.
