Are Western Companies Leaving China? Navigating Choppy Waves Toward Friendlier Shores

Geopolitical tensions between China and the West are rising and, with it, talks of friendshoring, reshoring, and decoupling. To what extent are Western companies offshoring production from China? Business surveys show that a quarter of US firms are looking to move production outside of China and fewer than half see China as a top three investment destination. European firms are less likely to shift investment away from China, according to these surveys. China still has a lot going for it and most companies would prefer to stay in China. However, the underlying pressure to decouple simply cannot be ignored. We expect that Western companies will likely continue to offshore production from China and move to friendlier shores.