The professor of international economics at the IMD Business School in Lausanne, Richard Baldwin, has said China is still a pivotal player in global manufacturing. He has argued that moves to shift outsource manufacturing operations to other parts of the world could prove difficult owing to China’s role in interconnected global supply chains. Report by Leatherbiz.

At the end of 2023, Professor Baldwin worked with the Organization for Economic Co-operation and Development (OECD) on an update to its Trade in Added Value database, which aims to track how much added value countries offer in the production of goods and services that are consumed worldwide.

In the recent update, the OECD calculated that the US market, for example, accounted for 17.1% of China’s gross export value in 2020, but that factoring in “backward linkages” and value added content, the true figure was 20.8%.

One implication of these findings is that brands and retailers who want to move product sourcing away from China may find it difficult to achieve the same levels of added value by importing from other countries.

Commenting on this recently to media in China, Professor Baldwin said: “China is the world’s sole manufacturing superpower. Decoupling from China would be difficult to say the least.”