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| Financial Times |
The United States and Europe need to inject an additional $23.6 trillion in investments over the next 25 years to reduce their dependence on China in vital sectors, most notably manufacturing and technology.
This came according to what was reported by the British newspaper "Financial Times", citing a study conducted by the consulting firm "EY-Parthenon".
According to the study, the United States' share of these investments will amount to $13.7 trillion by 2050, while the Eurozone's share will reach $9.1 trillion, and Britain's around $800 billion.
The newspaper explained that these funds should be directed towards developing infrastructure, supporting research and development bases, enhancing software, building production capacities, and restructuring supply chains that are currently heavily linked to China.
The Financial Times noted that the annual investment required by the United States, amounting to $550 billion, is close to its spending last year on data centers, which was $600 billion, thus putting the amount into realistic context.
Mats Persson, an analyst at EY-Parthenon, said that the total additional investments required annually from both sides (Europe and the United States), amounting to about $940 billion, are not impossible in theory, but he stressed that they come in addition to current spending in the areas of energy, technology, defense and infrastructure.
The newspaper quoted Pearson as warning that relocating supply chains locally, without placing unbearable financial burdens on taxpayers and consumers, will be one of the most complex tasks facing governments and businesses in the coming years.
The report warned that efforts to reduce reliance on China could lead to higher prices, given that Chinese products enjoy a price advantage of between 20% and 100% compared to their Western counterparts. The analysis predicted that Europe would experience price increases of between 1% and 2.5% in key sectors, which could prompt the European Central Bank and the Bank of England to gradually raise their inflation targets, currently at 2%.
In conclusion, Pearson suggested that a "partial decoupling" scenario was the most likely, in which companies would have to carefully select the sectors to which they direct their investments, rather than completely severing economic ties with Beijing.
