China’s relationship with the West only continues to sour throughout the course of this year. For UK businesses, this has made moving the supply chain away from the world’s second-largest economy an easier option.

Tony Danker, the director-general of the Confederation of British Industry (CBI), has said, “Every company that I speak to at the moment is engaged in rethinking their supply chains. Because they anticipate that our politicians will inevitably accelerate towards a decoupled world from China.”

These comments were first reported by the Financial Times on July 29. Besides the Russian invasion of Ukraine, China has been engaging in a nerve contest with foreign nations over its territorial disputes with Taiwan and in the South China Sea. Beijing already stirred distaste in Europe last year after retaliating against Lithuania economically over Taiwan sentiment.

As more British corporations rush to sever ties with China, the U.K government will also have to adjust. 

Danker said it would redefine the trading strategy for Britain, including seeking new trade partners and reviving relationships with old ones, such as those in the European Union.

He said, “If the political experts and security experts are right, we are all going to need to be good friends again…We need new strategic alliances in the world.”

It will be expensive and inflationary to exclude China from corporate supply chains. Danker forewarned that prices would unavoidably soar. At least, that might not be an instant effect.

Elsewhere, China’s handling of the pandemic is also draining patience from businesses. As the Wall Street Journal reported on July 10, New York-based Inter Parfums Incorporated is pulling away from the Asian country after enduring two months of stagnation from the Shanghai lockdown.

Founder Jean Madar lamented, “How good is it to have cheaper components when you cannot get them? For a consumer-products company like us, you need to have super stability in supply.”

Sign up to receive our latest news!

By submitting this form, I agree to the terms.