Reducing dependence on China could cost the West $23.6 trillion.
Replacing cheap Chinese goods with local products could accelerate inflation.
The reduction of dependence on China in key technology and manufacturing sectors of the US and Europe will require additional investments of $23.6 trillion over the next 25 years. Point.md reported this, citing the Financial Times.
According to calculations, by 2050, the US will need $13.7 trillion in investments, the eurozone $9.1 trillion, and the UK $800 billion. Experts note that for the European Union, this is almost equivalent to doubling the annual budget.
The report's authors noted that completely abandoning Chinese products is practically impossible. This is attributed to China controlling the supply of over 60% of lithium and cobalt, as well as nearly 80% of graphite and rare earth metals.
It was also emphasized that Chinese products are significantly cheaper than many local alternatives, and replacing them could accelerate inflation. According to the report, prices in some strategic sectors in Europe could rise by 1–2.5%.
Experts propose a "partial decoupling" strategy as the most optimal solution. According to this, the financial burden on the state and businesses can be reduced by making targeted investments to strengthen the most vulnerable supply chains.
