The Global Production Shift and Its Inevitable Consequences

Suppose total global production is represented by S, and China’s production is s. Similarly, global consumption is X, and China’s consumption is x. In the idealized future envisioned by many, all four variables grow over time—especially s and x, outpacing the growth of S and X.

However, this leads to a harsh mathematical and economic reality: foreign production (S − s) and foreign consumption (X − x) must eventually shrink in absolute terms. That is, as China manufacturing grows faster than the global average, other economies will inevitably consume and produce less.

This isn’t just a forecast—it’s a fundamental contradiction of resource allocation in a materially limited world. The pie can’t grow forever.

What Declining Foreign Consumption Looks Like

No nation or people accept lower consumption levels easily. Economic well-being is tied closely to how much people can consume. Americans don’t want to consume less. Europeans don’t. Neither do the Chinese. That’s a constant.

Yet, consumption can be reduced through two primary channels:

1. Inflation — When prices rise faster than income.

2. Falling incomes — Forcing households to cut discretionary spending.

In the case of the U.S., as a financial empire, the most probable path is inflation: nominal wages stagnate while prices for goods and services surge. This slow erosion of purchasing power leads to hidden austerity.

But the U.S. won’t sit idle. When facing declining consumption, many developed economies attempt to use trade policy and high tariffs to shield themselves from more efficient foreign producers—particularly China-based OEM and ODM suppliers.

Trade War and Efficiency: Who Has the Edge?

While market economies are meant to boost efficiency and shared prosperity, high-tariff policies do the opposite. They distort trade, disrupt global supply chains, and lower overall industrial efficiency.

The real nature of the U.S.–China trade war is a contest over who can organize more efficient manufacturing ecosystems. The country with the most fragmented or incomplete supply chains suffers more in this kind of confrontation.

This is especially true in today’s economy, where global trade isn’t just about raw materials or final products—but intermediate goods.

Modern production—especially in electronics, machinery, and consumer tech—relies on the seamless collaboration of thousands of specialized factories, each contributing a unique component or subsystem.

 Complex Supply Chains: The OEM/ODM Case

Take BOE (Beijing Oriental Electronics), for instance. Its factories in Hefei are supported by over 100 local suppliers, and thousands more nationwide. A single laptop or smartphone might involve over 10,000 businesses across the supply chain—PCB manufacturers, wire harness producers, battery suppliers, enclosure makers, and more.

This is the essence of OEM/ODM production: a vast, interdependent network built on trust, coordination, and long-term investment. Platforms like chinaoemodm.com aim to connect such manufacturers globally.

Trying to dismantle these networks by tariff walls is self-defeating. No single country can replicate this infrastructure from scratch—not even the U.S. The skills, systems, and people aren’t easily transferable or replaceable.

A missing part in the middle of a long supply chain halts the entire system. And with every attempt to oversimplify production, both costs rise and product quality declines.

Defying Economic Gravity

Unless the U.S. possesses supernatural industrial power and its workers are somehow more capable than the rest of the world’s combined manufacturing talent, it’s difficult to imagine how it could reverse the global production trend.

As the productivity of China and other developing economies continues to rise, the gap will eventually become too large. Attempts to resist this shift—through protectionism or financial maneuvering—will only delay the inevitable.

In the end, resisting the global production shift is resisting the laws of economics.