Vikram Sahu, Head of Asia Pacific Research, discusses the cost of re-shoring supply chains, which BofA Global Research estimates will be roughly $1 trillion spread over a 5-year capex cycle. He also explains the ways in which China may offset the lost manufacturing revenues from supply chain repatriation, which potentially represent around 7% of its GDP.
Watch the CNBC TV interview and read the Supply Chain report.
- We expect a bifurcation of where supply chains will head; low return industries will likely move supply chains to South Asia while high market industries will likely move back to North America.
- Power rivalries can lead to improvements in productivity and nominal GDP.
- Re-shoring is structural, long term and will play out because we are shifting from shareholder capitalism to stakeholder capitalism.
Vikram Sahu, Head of Asia Pacific Research, BofA Global Research