The cruel world laughed when ‘Gwynnie’ first announced her plan to break up with Coldplay crooner Chris Martin in a structured, reflective way designed to manage a difficult relationship today into functional and healthy co-operation down the line. But no one laughs at the Kiel Institute for the World Economy ( Kiel Institute - Understanding and Shaping Globalization | Kiel Institute (ifw-kiel.de)), who last week counselled something very similar for German supply chains: Cost of decoupling from China for German economy severe but not devastating (sendibm1.com).
It has long been clear that for most European economies (including the UK), complete ‘cold turkey’ decoupling from Chinese supply chains is not an option. The years of Chinese head-start, the technical know-how, the low cost-base and the pure investment firepower all militate against it. But perhaps Gwyneth and the Kiel Institute point the way to a selective de-risking and de-escalation of trade hostilities that can help our economies to thrive independently in the long run? A build-up of vulnerable areas of our supply chains and a more collaborative approach in less sensitive ones. As the Kiel Institute study concludes:
A more gradual derisking approach minimises costs compared to a sudden, hard decoupling.”
Or, to give the last word to Gwyneth, taking the time:
To use the opportunity to really look at yourself and heal broken patterns so you don’t find yourself in the same situation again.