China's Shift, U.S. Decoupling, and the End of Dollar Dominance: A Manufacturing Powerplay
President Biden’s first tweet of the New Year encouraged Americans to “make this the year of USA-made products.” But experts say this is laughable, as rebuilding manufacturing and supply chains in the West will take an entire decade—possibly till 2030.
Currently, the U.S. is trying to shift manufacturing to nearby countries like Mexico and Canada. However, comments from Mexican leadership have been harsh and critical, accusing the U.S. of maintaining a colonial mindset—still aiming to rule, force regime changes, and interfere in the internal matters of others.
For decades, the U.S. grew peacefully, partly because it did not heavily exploit neighbors like Canada and Mexico. But now, as manufacturing moves into the region, exploitation of natural resources and pollution is expected to rise—especially across South American nations.
Manufacturing setups use all factors of production aggressively—sometimes beyond human limits—which is why Chinese products have remained cheap under communist leadership. But now, with decoupling, Europe is most at risk, as Europe depends heavily on Chinese manufacturing and even sees China, not the U.S., as the next superpower.
Historically, the Chinese Communist Party (CCP) became a manufacturing giant after Deng Xiaoping’s 1979 U.S. visit, where he admired American industrial models. After returning to China, Deng opened up the Chinese economy but in exchange, accepted strict U.S. terms: access to technology, but only by suppressing domestic consumption, limiting population growth, and turning humans into pure labor units for global supply.
This built the massive manufacturing machine that powers global supply chains today.
Under Xi Jinping, this model is changing. Earlier, the CCP allowed only two presidential terms. Xi had rivalry with Premier Li Keqiang, an economist with deep U.S. ties. Xi opposed Li’s export-oriented model and instead promoted the “internal cycle”—produce and consume within China.
Despite internal resistance, Xi became President for Life, and in 2018, took over the Central Military Commission. By November 2022, during the 3rd National Congress, Xi removed both Li and Wang from power, replacing them with leaders who support anti-export, internal development strategies.
Xi’s personal history during the Cultural Revolution made him see the dark side of the U.S. dollar-based exploitative model. Despite four decades of labor, China only accumulated $3 trillion in reserves, while the U.S. printed $13 trillion in just three years for COVID checks and socialist freebies.
This led Xi to push for de-dollarisation. If global currencies peg to real value, the artificial suppression of sectors like manufacturing, farming, food processing, and logistics would end.
In such a world, Asia won't need to export as much, and even if it wants to, the West won't be able to afford it because exchange rates would be too high.
That’s why decoupling is focusing on China, the main supplier to the world. If China pulls back, the West may struggle to survive, as basic goods come from China's labor-intensive supply chains built over 30–40 years of exploitation.