Experts Analyzed Shifting Global Supply Chains
Harvard professor Willy Shih noted that manufacturers still depend on Chinese components despite shifts to Mexico and Vietnam.
Updated on Oct. 14, 2026 in Manufacturing
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Harvard Business School professor Willy Shih explained that companies are moving final assembly to countries like Mexico while maintaining reliance on Chinese suppliers. This strategic shift is driven by a desire for flexibility amid rising geopolitical uncertainty.
Why it matters
Manufacturers are seeking to diversify their risks and navigate shifting trade policies by rearranging supply chain networks. However, the deep integration of existing supplier ecosystems makes achieving full independence a long-term goal.
China's direct share of U.S. imports has declined since 2017, yet manufacturers continue to import intermediate components from Chinese suppliers. Localizing full supply chains to regions like Mexico remains a process projected to take approximately one decade.
The players
Willy Shih
He is a professor of management practice in business administration at Harvard Business School who has 28 years of industry experience.
The details
Companies are currently prioritizing agility by shifting final product assembly to nations like Vietnam and Mexico. This transition maintains upstream dependencies on Chinese manufacturing networks, which continue to provide essential intermediate goods for global products.
Timeline
Since 2017, China's direct share of imports to the United States has experienced a decline.
On October 9, 2026, Willy Shih discussed these global supply chain trends during a virtual media briefing.
Market Landscape
This trend mirrors the ongoing reorganization of international trade routes that began shifting after the 2017 change in U.S. import demographics. It highlights how companies are balancing nearshoring efforts with the practical realities of established global supplier networks.
Consumers may notice changes in product origin labels as final assembly moves to countries like Mexico or Vietnam. Despite these geographic changes, retail prices and product availability remain tied to the complex, ongoing reliance on Chinese intermediate components.
The takeaway
Achieving complete supply chain independence is a complex process that requires significant time and investment to build new infrastructure. Companies prioritize agility to handle immediate risks while recognizing that supplier networks remain deeply interconnected for the foreseeable future.
Further reading
Learn more about the current Manufacturing landscape and industry trends.
Source note: This article includes information reported by Chinadaily.
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