As corporations like Microsoft, Dell, Stanley Black & Decker, Blizzard Entertainment, and Airbnb pull back on China, dozens of others are shifting their global footprints, sighting everything from supply chain concerns to concentration risks. Investors from BlackRock to JC2 Ventures, and the world’s top Tech. firms are making moves to protect their intellectual property (IP) and competitiveness—with many moving their next-gen development projects, like cloud and artificial intelligence (AI), to other countries.
Behind closed doors, leaders and board members will tell you that political tensions, cybersecurity, and rule-of-law concerns are also driving these decisions. IBM is the latest China casualty, who just this week announced they are shutting down their 1000 person R&D facility there.
In the intricate web of global trade, supply chains are the lifelines that connect the world, driving economic growth and ensuring the seamless flow of goods and services across borders. However, as the world has evolved, so too have the complexities of these supply chains. A subtle yet significant imbalance has emerged, where the concentration of power in specific regions has begun to influence global trade dynamics and economic stability. Today, as businesses and economies recover and rebuild in a post-pandemic landscape, the concentration of supply chain power in regions like China has come to the forefront of strategic and governance discussions.
I talked with John Chambers, Cisco’s Chairman Emeritus and CEO of JC2 Ventures, a tech. leader who is pessimistic on China and betting on India, France and America: saying, “I don't want my startups doing business in China. We are seeing early signs that China is losing its [market] leadership. I felt India would be the most innovative nation in the world over the next several decades. With the best relationships with America, I'm betting on India and big on strategic partnerships.”
A recent report by the State Council Information Office, the People’s Republic of China found that China’s share of global manufacturing output reached around 30% in 2022, equaling nearly $4 trillion, compared with 28.5% in 2018 and 22.3% in 2012. While this concentration has led to remarkable efficiency and cost-effectiveness, it also exposes significant vulnerabilities. A disruption in a single region can now have far-reaching consequences, potentially destabilizing the entire global economy.
Some
clothing manufacturers are moving to Central America.
Philippines
set to become manufacturing hub as expansion shifts from China. Record-high
$49.1b in electronics exports in 2022 set to attract more investors. JLL, a
global real estate company, states that companies are diversifying their
manufacturing locations across India and Southeast Asia, including the
Philippines, to offset supply chain disruptions in China.
As
of January 2025, WuXi Biologics, a Chinese pharmaceutical company, was
selling its Irish vaccine facility to Merck, a US drugmaker. This sale was
made in anticipation of potential US legislation that would restrict business
for Chinese biotech companies.
Many of the name brand and generic medications that millions of Americans rely on every day, from antibiotics and blood pressure medicines, to cancer drugs and blood thinners, are being manufactured in China, or rely on materials that come from China.
Norb
Leahy, Dunwoody GA Tea Party Leader
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