https://www.wsj.com/articles/an-allied-plan-to-depend-less-on-china-11588288513?mod=opinion_lead_pos10
The Covid-19 pandemic is prompting reconsideration of issues that were thought to be settled. One is the wisdom of China as a hub in vital supply chains, a reality driven by cost considerations and the belief that integrating China into the global economy would moderate Beijing’s behavior. Unfortunately, China hasn’t moderated. Beijing has been an unreliable supplier that pressures trading partners.
Roughly three-quarters of American companies report supply-chain disruptions in China, according to a spring survey conducted by the Institute for Supply Management. The Japanese and Australian economies have been severely hurt by China’s lockdown of Hubei province and other supply interruptions. China’s official Xinhua News Agency has threatened to exploit Beijing’s control over medical supply chains as retaliation against U.S. efforts to hold China accountable for its actions during the pandemic.
A re-examination is overdue. Japanese Prime Minister Shinzo Abe has set aside $2.2 billion of Tokyo’s stimulus package to assist Japanese companies in relocating production from China to Southeast Asia. The White House’s Larry Kudlow has suggested that the U.S. government could pay moving costs for U.S. companies that leave China. South Korea appears to be planning to shift several important factories from China to India.
Washington and its partners in Asia should set up new supply chains, restructure trade relations, and start to create an international economic order that is less dependent on China. A multilateral “coalition of the willing” approach would better align trading ties with political and security relationships. It would also help India and nations in Southeast Asia develop more rapidly, becoming stronger U.S. partners.