Covid's Effect: World Dependency on Chinese Supply Chains

Author(s)

Rhiannon TooleFollow

Major

Supply Chain Management

Second Major

Chinese

Advisor

Walsh, Brian

Advisor Department

Supply Chain Management

Date

5-2022

Keywords

Supply Chains, Dependency, Reliance, Factors, Global, China

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 License.

Abstract

COVID’s Effect: World Dependency on Chinese Supply Chains

Since the 1990s, China has accelerated to become a global economic superpower. After the nation overtook Japan as the world’s second largest economy in 2010, it began to become clear to the world that China was no longer a nation to be overlooked, and that utilizing their massive economy would prove to be invaluable from a growth and monetary standpoint. Of course, this all came to a halt in early 2020 due to COVID’s impact on global supply chains, many of which were sourced out of the virus’ origin country. Companies worldwide began to reevaluate if China, with their ongoing lockdowns and supply chain unpredictability, was the ideal place to remain if business was to move forward. This has been an ongoing debate for roughly two years now; in an article released by Fortune 500, Bank of America analysists suggested it would cost a total of $1 trillion over 5 years for all foreign firms to relocate business elsewhere, clearly neither an easy move nor a small sum of money to do so.

The goal of this project is to identify the ways in which we have arrived to this point of severe dependency on China for our goods and services. I will be exploring the benefits as well as the hinderances of sourcing from China, as well as the various ways companies are working to move closer to home while regaining upstream visibility. I will also be measuring the internal effect COVID has had on China’s domestic economy, and investigating the ways in which the nation has attempted to mitigate these issues before they become a larger issue.