The novel coronavirus Covid-19 pandemic could lead to an acceleration in the reshoring of manufacturing to Europe. Alicia Garcia-Herrera, senior fellow at the European think tank Bruegel, said in an interview with Exame magazine that the shift could be significant for countries such as Spain and Portugal.
The move out of China is also benefiting countries such as Vietnam, but the pandemic has reduced the appeal of those destinations. Herrera said that “we must expect big changes” as Covid-19 forces a “deglobalization.” Even though not all manufacturing will be relocated to Europe, she continued, “it will be more than we thought.”
She added, “We are moving towards a world with less movement of people. We are in deglobalization mode.”
Herrera noted that many companies – especially Japanese, Taiwanese and South Korean – have for some time been thinking of relying less on China, and that the pandemic is speeding up the process.
“China was already losing before the coronavirus and will lose even more now. The risk of excessive concentration is in the minds of all leaders of large companies,” she said.