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CSIS: American & EU Companies Have Little Intention to Leave China

Decoupling Between Washington and Western Industry

By Scott Kennedy and Shining Tan

Although the Trump administration does not openly embrace the idea of decoupling, its various policies – restrictions on high-tech exports to China, expanded investment limits, and efforts to have American companies move production out of China and on-shore manufacturing in the United States – effectively add up to a decoupling strategy. There are some signs that because of the trade war and other risks, some American companies are diversifying their supply chains; however, it appears that the vast majority of companies from the United States – and the broader West – are not heeding this call. Instead, there is a growing gap – or decoupling – between Trump administration aims and Western business behavior. The latest evidence comes from the European Union Chamber of Commerce in China, which just issued its 2020 Business Confidence Survey. Conducted in February 2020, the survey shows that the overwhelming proportion of European companies are not planning to leave China (Figure 1). Only 11% of respondents are considering shifting current or planned investments from China to other markets, which is lower than a year ago. For those who are considering moving, 45% are considering somewhere in Asia, followed by 27% looking at Europe, and only 11% North America.


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#trade #asia #china #asiapacific #supplychain #fdi #economy #manufacturing #globaltrade #trends #news #confidence #econdev

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