For years, China has played an essential role in the global division of labor as a reliable, low-cost producer of products designed and developed in the U.S., Europe and Japan. But China is on the verge of losing that dominance due rising labor costs, the persistence of strict COVID lockdowns, and its close ties to Russia during the Russia-Ukraine war.

Ryan Monarch, assistant professor of economics, sees a big problem ahead for Chinese manufacturing. "Rising tensions between the United States and China, especially during the trade war of 2018-2019, had led some companies in Western countries to reconsider this reliance on Chinese products, but, much more so than the Russia-Ukraine crisis, China's ongoing 'COVID Zero' policy has greatly accelerated the desire to diversify," he says. "Chinese government lockdowns, even if they only last a few weeks, have wreaked havoc on supply chains and have encouraged more and more companies to reduce their reliance on China, even if it means higher costs in the short run," says Monarch.

Read more in the International Business Times article, "COVID And The Russian-Ukraine War Could End China's Manufacturing Dominance."