FT: West would need $23.6 trillion to reduce economic dependence on China

The United States and Europe would need to invest an estimated $23.6 trillion over the next 25 years to significantly reduce their economic dependence on China, according to an analysis by EY-Parthenon cited by the Financial Times.

The report estimates that the United States would require $13.7 trillion in investment, while eurozone countries would need $9.1 trillion. The United Kingdom would have to spend a further $800 billion.

According to the analysis, the investment would be needed to establish new manufacturing and logistics networks, processing facilities and research centres, as well as to replace software supplied by Chinese companies.

The Financial Times reported that the U.S. government and private sector would need to invest around $550 billion annually—an amount comparable to the roughly $600 billion American technology companies spent on data centres and processing facilities in 2025.

For the European Union, the report said annual investment would require nearly doubling the bloc's budget.

The analysis suggests that efforts to decouple from the Chinese economy could also increase inflation by as much as 2.5% in some sectors.

Despite the scale of the required investment, the report's authors concluded that annual spending of about $940 billion would not, in theory, be "unmanageable." However, they noted that it would come on top of existing investment commitments, including spending on infrastructure and defence.

By Sabina Mammadli