The recent rise in oil prices has led commentators to speculate that soaring transportation costs will undermine China’s competitiveness as a low-cost manufacturing hub and spark a process of deglobalisation. According to this view, companies will relocate outsourced manufacturing closer to home or even back in the US itself.
Higher oil prices are no doubt eroding the margins of firms with production facilities in Asia, but the talk about deglobalisation reflects wishful thinking....
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