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The View | US-China decoupling: inward turn could undo gains made in ‘de-risking’ efforts
- For all the talk of the benefits reshoring and ‘de-risking’ can bring domestic workers, they also introduce new risks to people’s way of life
- Neither the US nor China can afford to ignore these new risks, including limited job creation, expensive subsidies and greater material costs
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Why you can trust SCMP
Localisation policies are gaining appeal in both the United States and China, driven by global uncertainties and persistent bilateral tensions. These policies emphasise local production and consumption, self-reliance and reduced dependence on global supply chains, all in the name of “de-risking”, which has become the watchword of our time.
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While these policies are touted as beneficial for the economy and local workers, they also introduce new risks that can leave their people worse off.
The Covid-19 pandemic and Russia’s invasion of Ukraine have exposed the risks of relying on imports that can be disrupted by unforeseen events. The likely ripple effects of Israel’s escalating war in Gaza on energy and technology trade will serve as a stark reminder of the vulnerabilities that can arise with little warning.
Apart from the goal of self-reliance, the US and China also seek to protect sensitive technologies to safeguard national security, support domestic industries, enhance innovation and create jobs.
Localisation can also support climate goals by cutting the carbon emissions generated from long-distance goods transport.
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Moreover, slogans such as “Made in America” and “Made in China” appeal to the public and can score political points.
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