Cutting the West’s reliance on China would carry a staggering price. A new study puts the cost of decoupling from China at $23.6tn over 25 years, and warns the bill would land hardest on the industries building Europe’s tech future.
The West has spent three years talking about reducing its dependence on China. A new study tries to price it. According to an exclusive report in the Financial Times, the consultancy EY-Parthenon estimates that the US, the eurozone and the UK would need to invest an extra $23.6tn over 25 years to end their reliance on China in critical industries.
That figure covers manufacturing, technology, research, software and the supply chains beneath them. The wider effort to cut dependence on Chinese chips and rare earths has been building across Western capitals for months.
The burden is split unevenly.
The analysis puts the US bill at $13.7tn, the eurozone’s at $9.1tn and the UK’s at $800bn by 2050. Together that is roughly $940bn in extra spending every year. It would sit on top of what these economies already commit to energy, defence and infrastructure.
