Faced with COVID lockdowns, worsening U.S.-China tensions, and now an indefinite power cut in China’s heartland, companies are exploring how to divert their supply chains away from China.
On Wednesday, the Japanese newspaper Sankei reported that carmaker Honda was considering building a parallel supply chain outside of China to lessen its dependence on the country. Forty percent of the carmaker’s production is currently done in China. A Honda spokesperson characterized the plan as “risk-hedging” in a statement to Reuters, but said it was “not quite the same” as decoupling.
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