It is a strategic necessity for all countries to reduce dependence on China and undertake “nearshoring” of manufacturing as soon as possible. When small Lithuania established diplomatic relations with Taiwan,  Beijing blocked 90% of Lithuanian exports to China as punishment. It also slammed extensive tariffs and duties on Australian exports just because that country called for an open investigation into the origins of the Covid-19 pandemic. Lastly, when Japan detained the crews of Chinese boats which trespassed into its territorial waters, Beijing cut off critical supplies of rare earths to that country for a month.Hence, given its propensity for “economic coercion”, countries should seek to reduce dependence on China and decrease its leverage over them. Perhaps, one of the few good things to happen during the Trump administration was China’s slipping from 1st to 3rd largest trading partner of the US (due to the trade war). Furthermore, the pandemic has exposed the vulnerability of supply chains. Bottlenecks have contributed to inflation in many countries. “Nearshoring” is critical to solving this problem and companies should also be encouraged to devise a “post-China” strategy.

It is a strategic necessity for all countries to reduce dependence on China and undertake “nearshoring” of manufacturing as soon as possible. When small Lithuania established diplomatic relations with Taiwan,  Beijing blocked 90% of Lithuanian exports to China as punishment. It also slammed extensive tariffs and duties on Australian exports just because that country called for an open investigation into the origins of the Covid-19 pandemic. Lastly, when Japan detained the crews of Chinese boats which trespassed into its territorial waters, Beijing cut off critical supplies of rare earths to that country for a month.Hence, given its propensity for “economic coercion”, countries should seek to reduce dependence on China and decrease its leverage over them. Perhaps, one of the few good things to happen during the Trump administration was China’s slipping from 1st to 3rd largest trading partner of the US (due to the trade war). Furthermore, the pandemic has exposed the vulnerability of supply chains. Bottlenecks have contributed to inflation in many countries. “Nearshoring” is critical to solving this problem and companies should also be encouraged to devise a “post-China” strategy.

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