They are rather ones where a country, or its allies, do not have ‘control’ over the relevant supply chains. ESG considerations and regulations, as well as risks associated with financing, payments and security of supply have individually or collectively created barriers to alternative sources, above all in Africa and other emerging or developing economies. But necessity as they say makes beggars of us all, and is now (belatedly) shifting evaluative processes about sourcing raw materials and resources from higher risk origins.


Perhaps China’s greatest success on this front has been in the advanced development of production of raw materials, intermediate and finished goods related to the energy transition, with its related technologies widely recognised to be far ahead of most of the developed world. If the developed world wants to partially or even wholly exclude China from its supply chains, in this area or any other, be that to address trade imbalances, for security or any other, likely politically motivated reasons, then the costs are going to be high. The willingness of its businesses and consumers to bear these costs and the likely accompanying disruptions will be the ultimate arbiter of the success or failure of pursuing such a course of action. For many businesses the primary consideration will be whether supporting such political policies is a commercially viable proposition, regardless of any perceived benefits of currying political favour.


In conclusion two observations: much of what might be described as the low hanging fruit in bringing back production to the USA has already been set in motion, thanks to the IRA and CHIPS acts, as evidenced by the 150% increase in US Manufacturing Construction between Q4 2022 and 2024. Eminently this has been via costly subsidies and tax credits, but that is a separate issue. Secondly this is a likely golden opportunity for the the ‘global south’ (better described as ‘non-aligned’ countries) to decouple from the West and develop the myriad opportunities to forge stronger multilateral commercial and trade alliances, which will fortify their resilience in economic terms, with Asia and the GCC countries likely to be at the forefront. Deglobalization by extension becomes a case of re-routing and rebalancing, which is unlikely to be an orderly process, but more than likely achieved at the expense of those that pursue isolationism.


Marc Ostwald E: marc.ostwald@admisi.com T: +44(0) 20 7716 8534


IF THE DEVELOPED WORLD WANTS TO PARTIALLY OR EVEN WHOLLY EXCLUDE CHINA FROM ITS SUPPLY CHAINS...


6 | ADMISI - The Ghost In The Machine | Q2 Edition 2025


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