EY Parthenon estimates $23.6 trillion needed to reduce China reliance
2026-07-19
EY Parthenon estimated that the US and Europe would need an additional $23.6 trillion over the next 25 years to eliminate their dependence on China in key industries such as manufacturing and technology. The figure was calculated as the cost of building their own infrastructure, research and development, software, manufacturing and supply chains.
$13.7 trillion for the US, $9.1 trillion for Europe
Required investment would total $13.7 trillion in the US, $9.1 trillion in the euro zone and $800 billion in Britain. To advance decoupling from China, the US government and companies would need annual investment of $550 billion. That is close to the roughly $600 billion that major US tech companies invested in data centres in 2025. The spending required for the European Union would be almost twice the EU's annual budget.
Localising supply chains remains a long-term challenge
Western countries are trying to weaken China's dominance over supply chains for strategic materials. But replacing resources and raw materials that rely heavily on Chinese goods requires huge sums of money, underscoring the difficulty of shifting to self-sufficiency.
Mattias Persson, a former adviser to the British prime minister's office and EY Parthenon, said making supply chains local without placing an excessive burden on taxpayers and consumers would remain one of the most difficult challenges for both companies and governments for many years to come.
EY analysts said annual spending of $940 billion over 25 years was not theoretically impossible, but would be needed in addition to existing investment in energy, technology, defence and infrastructure. According to Persson, initial annual investment may be small, but it could grow as supply chains are switched.
The report also said funding would need to be directed not only to factories and infrastructure, but also aggressively to worker training and factory automation.
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