As the Russia-Ukraine war and the Covid-19 pandemic expose the fragility of global supply chains, the U.S. and its allies are pursuing an alternative sort of trade.

The first practice is “offshoring,” which means transferring production overseas to save money. After that, “onshoring” or “reshoring” helps bring production back home to lessen the risk of disruption of supply chains.

And now, the new terminology is “friend-shoring” or “ally-shoring,” which is a reshoring practice restricted only to reliable friends and allies.

To address the future of the global economy and U.S. economic leadership, Treasury Secretary Janet Yellen favors friend-shoring. She said in April last year that this practice can help the U.S. extend market access safely and lower risks to the economy of the country and its trusted trade partners.

Wall Street Journal trade and international economy reporter Yuka Hayashi said that a nation tries to work with its allies and friendly countries under friend-shoring. They will increase the production of critical products and then expand trade with each other. This idea reduces reliance on nations like China and Russia, with different values and economic systems.

A current affairs commentator Zhang Tianliang, stated on May 17 that it is easy to understand that many companies will move or withdraw their industrial chains out of China. China keeps closing the cities, posing a lockdown on factories, or suddenly blocking ports. A few days ago, President Joe Biden welcomed the leaders of the ten ASEAN countries at the White House. It seemingly signifies that some supply chains will be slowly relocated to ASEAN.

He added that those with knowledge and financial resources in China might leave the financial hub of Shanghai and the mainland. He took Li Ka-shing, the prominent businessman of China, as an example. Li is now investing a lot in Vietnam, which may be a future development direction.

According to Zhang, trustworthy countries will form a circle. If the unreliable countries are not in the loop, allies will not outsource some industries to them. This practice will be a fatal blow to China’s economy.

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