The disruption in supply chains caused by China’s Zero Covid policy, adding to inflationary pressures, has been a timely reminder of just how exposed we truly are.
In any case, political leaders in both China and the West are ramping up the tensions before western countries have made themselves economically resilient enough to withstand the consequences.
Companies are scrambling to do more onshoring, nearshoring, and friendshoring of production, but it is not proving easy. In a recent interview with the Financial Times, Tony Danker, director general of the CBI, said that the UK would need to find new trade partners and rekindle old ones – for example in the EU – if the West severed its China links. “If the political experts and security experts are right, we are all going to need to be good friends again,” he said.
In preparing for geopolitical upset, companies are being forced to do something which is commercially…
