Caught in the deglobalisation crosswind? De-risking by “China+1” or “In-China-For-China”

Abstract

PurposeForeign firms in China, particularly those from the Global West, are in a difficult position as deglobalisation and strained international relations create risk. This paper offers research avenues on how operations and supply chain management scholars can analyse the risk factors, de-risking practices, and de-risking outcomes of foreign firms in China.Design/methodology/approachThis paper is primarily based on interviews with managers of foreign firms’ subsidiaries and joint ventures in China between late 2019 and early 2024 and employs institutional theory to develop a conceptual framework.FindingsSix risk factors motivating foreign firms to consider “China+1” (diversification and multi-sourcing) or “In-China-For-China” (localisation with potential bifurcation) are identified. Four pathways focusing on politics, locations, technologies, and people enable further investigation of these de-risking strategies.Originality/valueThis is the first paper to take a deeper look at perceptions, worries, and considerations of foreign firms in China and offers specific recommendations for impactful research.