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You can reduce reliance on China without abruptly moving all production. Start by identifying which inputs or operations could stop output, then qualify alternate capacity, check whether it shares upstream risks with existing suppliers, and shift work in controlled stages. Keeping production in China while adding supply elsewhere—often called China-Plus-One—is one option, not a requirement to exit.
Start with the dependencies that could stop production
Do not begin with a list of countries. Begin with the product, input, or production step whose loss would halt or materially impair output. Rank exposures by three factors: the likelihood and impact of disruption, their importance to the business, and how difficult they are to substitute. Record the evidence and assumptions behind each ranking so that teams can compare options consistently.
The OECD describes these as useful dimensions for assessing trade dependencies, but notes that there is no commonly agreed definition or established method for measuring them. Your ranking is therefore a company-specific decision framework, not a universal risk score.
Map more than the purchase order
For each critical input or operation, map the direct supplier and, where possible, the important sub-tier suppliers, raw materials, components, transport routes, and other shared dependencies. A second Tier 1 supplier is not a meaningful backup if both suppliers depend on the same constrained material, sub-tier source, or route. The OECD’s 2024 review cautions that backup suppliers may not mitigate single-source risk and that reshoring a direct supplier can leave upstream exposure in place.
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Also distinguish between a supplier’s stated capacity and capacity you can actually use: it must meet the product and process requirements and be available when the existing source is disrupted. The sources do not establish a universal checklist or threshold for supplier qualification, so define readiness for the particular product, market, and operation.
Choose a response for each exposure
Different dependencies may call for different responses. Compare each option against the same practical factors: independence from existing upstream sources; product and process capability; time and effort to qualify; logistics and border exposure; likely cost and working-capital effects; and operational or regulatory requirements in the destination market.
Rank #2
| Approach | What it means | What to assess | Important limitation |
|---|---|---|---|
| China-Plus-One or international supplier diversification | Add production or supply outside China while retaining a presence there. | Whether capacity is genuinely independent, qualified, available, and workable through the relevant logistics network. | A new supplier may share upstream dependencies with the existing source. |
| Nearshoring | Move an operation to a nearby country. | Available capability, transport and delay exposure, market access, and upstream sourcing. | Proximity alone does not eliminate supplier concentration or shared upstream risk. |
| Friend-shoring | Trade with allies or like-minded countries. | Regulatory and geopolitical considerations, as well as the supplier’s capability and independence. | Alignment does not establish that a particular supplier is qualified or independent. |
| Reshoring | Bring a supply-chain node back to the home country. | Domestic capability, concentration, cost, and the origin of upstream inputs. | Relocation is not a guarantee of resilience; upstream exposure may remain. |
| Inventory or stockpiling | Hold buffer stock to cover supply interruptions. | Lead-time uncertainty, likely disruption duration, shelf life, and carrying cost. | No universal stock level is established; the buffer must fit the product and risk. |
These approaches can be combined. For instance, a company might retain its China operation, qualify a separate source for a critical component, and hold a tailored buffer for an input that cannot be switched quickly. That is a planning example, not a recommendation for every manufacturer.
Do not treat the destination as the answer
There is no universally best alternative country in the cited evidence. Suitability depends on the product, destination market, company requirements, available capability, upstream links, logistics, and applicable rules. Verify current tariffs, trade restrictions, and market-specific requirements for the actual product and route before committing; the sources here do not establish current country-by-country costs or rules.
Qualify alternate capacity before relying on it
Adding a supplier is a production and quality change, not simply a purchasing change. Agree on evidence that the alternate source can make and deliver acceptable output under the requirements that apply to the product and market. Depending on the operation, that evidence may include accepted production output, traceability, required approvals, and a tested ordering and logistics flow. The precise checks belong to the product and process; the cited sources do not prescribe a universal pilot length, acceptance threshold, or transition timetable.
- Define the contingency. Specify which product, input, or operation the alternate source is meant to cover and what disruption it addresses.
- Check independence. Investigate material, component, sub-tier, and logistics dependencies that could expose both sources to the same interruption.
- Validate capability. Confirm that the alternate source can meet the relevant product, process, quality, traceability, and approval requirements.
- Test the operating flow. Establish that orders, documentation, transport, receiving, and any required approvals work for the route and destination market.
- Shift reliance only after readiness is demonstrated. Set the changeover conditions for the particular operation rather than assuming a generic schedule or volume split.
Keep the network map current
Supplier relationships and sub-tier sourcing can change, so a one-time map can become misleading. Revisit critical dependencies as sources, capacity, routes, and business requirements change. Focus management attention and joint contingency planning on business-critical suppliers; the OECD’s 2024 review emphasizes the value of ongoing analysis and coordinated plans for those relationships.
More suppliers can also mean more coordination and oversight. The OECD review identifies increased supply-chain complexity as a possible cost of multisourcing. Compare the resilience gained with the added qualification, monitoring, planning, and operational work; do not count supplier names as a measure of independence.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the broader evidence says—and does not say
In a 2 June 2025 summary of its Supply Chain Resilience Review, the OECD reported that the number of products sourced from a limited range of suppliers was 50% higher in the early 2020s than in the late 1990s, a trend it said was almost entirely driven by non-OECD countries. It also reported that China’s contribution to countries’ level of significant import concentration rose from 5% to 30% over 25 years, while the combined contribution of the United States, Germany, and Japan fell from 30% to 15%. These are aggregate measures, not forecasts for a particular company or evidence that a particular destination is the right alternative.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallThe same OECD summary said strategic manufacturing has high foreign exposure: 26% of its inputs come from abroad, and 27% of its output depends on foreign final demand. OECD modelling also found that policies aimed at relocalising could reduce global trade by over 18% and global real GDP by more than 5%, without consistently improving resilience; GDP stability would decrease in more than half of the economies analysed. These modelled, economy-wide findings are not estimates of the cost or outcome of an individual firm’s sourcing decision. They do, however, caution against assuming that moving production home automatically makes supply more resilient.
The practical aim is not to maximize the number of locations or to leave China by default. It is to reduce the specific dependencies that matter to your operation while keeping alternate capacity genuinely usable and the resulting network manageable.
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