Brookings Podcast on Economic Activity
What do we miss in standard supply chain measures?
Dec 21, 2023
The podcast discusses the challenges of decoupling the US-Chinese supply chains and the complexity of global supply chains during COVID-19. It introduces the concept of hidden exposure and proposes measurement methods to capture direct and indirect exposures. The dominance of China as a supplier in the US supply chain and the shift in perception of supply chains from positive to risky are explored. The distinction between idiosyncratic and systemic shocks in supply chains is discussed, along with strategies for achieving robustness and resilience in supply chain management. The risks and gains associated with being highly exposed to supply chains are also explored.
36:38
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Quick takeaways
- US manufacturers rely heavily on China in their supply chains, making decoupling more difficult and expensive than anticipated.
- Understanding the hidden exposure and complex network of supply chains is crucial for appropriate policy responses.
Deep dives
US Supply Chain Reliance on China
The podcast discusses a new study that reveals the extent of US manufacturers' reliance on China in their supply chains. The study finds that US manufacturers rely even more heavily on China than previously thought, making decoupling of US-Chinese supply chains more difficult and expensive than anticipated. This highlights the fragility and complexity of global supply chains, which were disrupted during the COVID-19 pandemic.
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