Supply Chains: Restructuring To Address Global Fragmentation

Geopolitical tensions and regulatory fragmentation are forcing businesses to confront the difficult decision of whether to restructure their global operations. Here we outline the main issues that should be considered when deciding whether to move elements of an international supply chain into or out of a jurisdiction, using China as an example. 

The analysis imagines an asset/capex heavy manufacturing business whose Chinese facilities produce goods for domestic consumption as well as for export, and sets out the key issues for boards that will help preserve enterprise value and operational continuity. These will be similar in other jurisdictions, although the political and regulatory context may differ significantly. This memo forms part of a series examining critical legal and regulatory decision points, opportunities, and risks facing leaders in an increasingly uncertain global business environment.