CCP-occupied China is a behemoth in global trade. The free world is unanimous on decoupling from it and everyone wants diversified, resilient supply chains in the wake of the Wuhan virus-inflicted Covid pandemic.

Here is a data-based analysis that explores ways and means of decoupling and diversifying for the free world, the US and India.

1. Global Trade with CCP-Occupied China

Let us first look at what the World Exports to CCP-Occupied China.

World exports to CCP-OCCUPIED China: ~$2.56 trillion (2023).

Raw Materials / Commodities: ($820 billion)

This major component of vital raw materials and low-cost (but polluting) energy resources provides the wherewithal for CCP-occupied China to “flourish” as a “world factory” for manufacturing finished goods.

Iron Ore and Metals (~$160 billion): Iron ore ($120 billion Australia, Brazil), Copper ($40 billion Chile, Peru).

Coal and LNG (~$70 billion): Australia, Indonesia, Russia.

Crude Oil and Petroleum ($500 billion): Despite the American ban, Iran supplies ~$43.8 billion (1.5 million bpd at $80/barrel) worth 16% of seaborne crude. Other suppliers: Saudi Arabia ($100 billion), Russia ($80 billion), Iraq ($50 billion).

CCP-occupied China imports huge quantities of farm produce mainly for domestic food and feed consumption.

Agricultural Commodities (~$90 billion): Soybeans ($60 billion Brazil, U.S.), Meat ($20 billion Brazil, Australia), Grains ($10 billion).

Intermediate / Semi-finished Goods:

These are also used to produce finished goods for export.

Integrated Circuits and Semiconductors (~$400 billion): Taiwan, South Korea, Japan.

Machinery and Equipment - Capital Goods (~$150 billion): Germany, Japan, U.S.

Consumer Goods:

Luxury Goods (~$50 billion): Fashion, Cosmetics, Cars (France, Italy, Germany).

Pharmaceuticals (~$30 billion): U.S., Europe.

Services (~$552 billion):

Travel, Transport, Business services.

Key Partners: U.S. ($143.5 billion goods, 2024), Japan, South Korea, Taiwan, Australia, Brazil, EU, Iran.

Another important aspect is defenec import.

Defence Import of CCP-occupied China:

Direct defence imports are limited due to CCP-occupied China’s secretive IP theft-based push for “self-reliance”. Imports include high-end components (e.g. jet engines, avionics) from Russia ($1-2 billion annually, estimated from SIPRI data) and niche technologies from Ukraine or Europe ($0.5 billion). Total: ~$2.5 billion.

This import profile reveals that most of the goods imported by CCP-occupied China are used in an opaque-market economy by captive, exploited labour and by environmental exploitation for manufacturing goods for export back to the world, at a big environmental and monetary “to - and - forth – transportation” costs.

Now, let us look at what CCP-Occupied China exports to the World.

CCP-OCCUPIED China exports to world: $3.38 trillion (2023)

Almost all of it is finished goods. No raw materials, no energy resources, no commodities.

Electronics and Machinery (~$1.45 trillion):

Smartphones and Computers (~$1 trillion): Mostly of substandard quality and involving IP theft (e.g., copied designs, reverse-engineered tech).

Integrated Circuits (~$150 billion): made from imported high-end chips.

Consumer Electronics (~$200 billion): TVs, appliances. Often criticized for lower durability.

Manufactured Goods (~$550 billion): Textiles and Clothing (~$300 billion), Furniture and Toys (~$100 billion), Chemicals and Plastics (~$150 billion).

High-Tech Products (~$180 billion): Electric Vehicles (EVs) (~$100 billion), Solar Panels and Batteries (~$80 billion).

Rare Earth Minerals and Magnets (~$10 billion): 90% of global supply.

Services (~$276.65 billion, 2024): IT, business services.

Key Partners: U.S. ($438.9 billion, 2024), EU, Japan, South Korea, Southeast Asia.

Another important aspect is defence export.

Defence Export:

Arms exports (e.g. JF-17 jets, CH-4 UAVs, naval vessels) to 50+ countries, primarily Asia (75%) and Africa (20%). Total value: ~$1.04 billion (2018, SIPRI), likely ~$1.5 billion in 2024 due to 211% growth (1998-2017). Major buyers: Pakistan, Nigeria, Myanmar.

Now, let us check how this trade can be curtailed for decoupling and diversifying.

How the World Can Reduce CCP-Occupied China’s Exports:

Let us check what the world can avoid importing from CCP-occupied China’s finished goods produced at great “to-and-forth” transportation costs.

Substitution and reduced consumption can help avert most of imports by most of countries. The US under the Trump Administration and India under the Modi Government are vigorously trying to be self-reliant and this will definitely serve the goals of environmental protection, labour rights protection and supply chain resilience.

Electronics ($1.45 trillion): Substandard quality (e.g., lower durability, IP theft) allows domestic substitution (e.g., U.S., Japan, South Korea, India and many other upcoming manufacturing countries). Reduction: $725 billion (50%), limited by cost and scale.

Textiles ($300 billion): Domestic production or reduced consumption. Reduction: $210 billion (70%).

Furniture and Toys ($100 billion): Domestic manufacturing or minimalism. Reduction: $80 billion (80%).

Chemicals ($50 billion): Domestic industries (e.g. U.S., EU). Reduction: $40 billion (80%).

Defence Trade ($1.5 billion): Substitutable via U.S., European, Israeli, and Indian arms. Reduction: $1 billion (67%).

Total: ~$1.056 trillion (31.2% of $3.38 trillion).

Challenges and Solutions for the Free World: Domestic substitution for electronics may be costly (20-50% higher) to begin with, but on scaling up, the costs would come down. CCP-occupied China’s rare earth dominance is also not invincible because there are hardly any patents and some producers have explored alternatives for rare earths, lithium and cobalt.

How CCP-Occupied China can reduce World's exports: There is little scope for it to reduce imports without impacting its exports or domestic needs like food and feed.

It may reduce imports of the following:

Luxury Goods ($50 billion): Domestic brands (e.g. Li-Ning) or reduced consumption. Reduction: $40 billion (80%).

Consumer Goods ($50 billion): Domestic toys, apparel. Reduction: $45 billion (90%).

Services ($100 billion, non-critical): Domestic providers. Reduction: $80 billion (80%).

Total: Meagre ~$165 billion (6.4 % of $2.56 trillion total imports).

Further, it may reduce the import of oil from Iran to respond to American ban.

Iran Oil ($43.8 billion): Domestic oil or renewables. Reduction: $9.4 billion (21%).

Defence Trade ($2.5 billion): Limited imports (e.g. Russian engines) can be reduced via domestic R&D, though quality lags. Reduction: $1 billion (40%).

Challenges for CCP-Occupied China

It won't be able to reduce imports and can be compelled to export what the free world needs to receive essential goods in exchange for the free world. It is a matter of who blinks first. The Trump Administration has made it to blink first. India can also do so.

2. CCP-Occupied China and India Trade

What India Exports to CCP-Occupied China

Total exports: $16.65 billion (FY24) Raw Materials and Commodities (~$7.75 billion), Iron Ore ($3.63 billion): Primary export, used in steel production.

Marine Products ($1.37 billion): Shrimp, fish.

Petroleum Products ($1.16 billion).

Cotton, Copper, Aluminium, Diamonds (~$1.59 billion): Raw or semi-processed.

Manufactured Goods (~$8.9 billion): Engineering Goods ($2.65 billion): Machinery, auto parts. Organic and Inorganic Chemicals ($1.23 billion).

Other (~$5.02 billion): Includes textiles, plastics.

As India increases its own manufacturing capabilities, it can reduce most of these exports.

Defence Trade:

Negligible direct defence exports due to geopolitical tensions and CCP-occupied China’s IP theft-based “self-reliance”. India faces non-tariff barriers (e.g. market access restrictions) for potential defence-related goods like electronics or components (~$0.1 billion, estimated).

What CCP-Occupied China Exports to India

Total exports: $101.74 billion (FY24)

Electronics and Machinery (~$59.69 billion):

Electrical Machinery and Equipment ($31.35 billion): Includes smartphones (e.g. Xiaomi, Oppo), which dominate 80% of India’s mobile market. Substandard quality (e.g. reliability issues, IP theft concerns) makes these substitutable.

Nuclear Reactors and Parts ($22.47 billion): Industrial equipment, tech copied from Western designs.

Consumer Electronics ($5.87 billion): TVs, appliances, often criticised for lower durability.

Manufactured Goods (~$19.15 billion): Organic Chemicals ($11.49 billion), Plastics and Articles ($5.66 billion), Fertilisers ($2 billion).

Critical Minerals (~$2 billion): Germanium, gallium, restricted since 2023, essential for semiconductors.

Most of this can be substituted by India if the government, private sector and people walk an extra mile to enhance production and reduce or modify consumption.

Recently PM Narendra Modi made a fervent and emotional appeal to people and traders / producers in this regard.

Defence Trade: Minimal direct arms exports due to India’s strategic autonomy and tensions post-Galwan. Indirect exports include dual-use electronics (e.g. Huawei, ZTE components) for military applications, estimated at ~$0.5 billion. Restrictions on Foxconn equipment exports to India (e.g. for iPhone production) aim to curb India’s high-tech growth.

It is high time India imposes tariffs on imports (as WTO has failed in maintaining supply chain resilience) and gives relief in income tax and corporate tax, along with more of production-linked incentives and incentives for research and development in critical sectors to manufacturers operating in India.

How India can reduce CCP-Occupied China’s Exports:

Electronics ($59.69 billion): Substandard smartphones, equipment (e.g. Xiaomi, Huawei) can be replaced by Indian brands (e.g. Micromax) or reduced consumption. Reduction: $35.81 billion (60%), limited by production scale.

Organic Chemicals ($11.49 billion): Domestic chemical industry (e.g. Reliance). Reduction: $9.19 billion (80%).

Plastics ($5.66 billion): Domestic production or reduced use (e.g. bioplastics). Reduction: $4.53 billion (80%).

Fertilisers ($2 billion): Domestic production (e.g. Indian Farmers Fertiliser Cooperative). Reduction: $1.6 billion (80%).

Defence Trade ($0.5 billion): Domestic electronics (e.g. Bharat Electronics) or Western suppliers. Reduction: $0.4 billion (80%).

Total: ~$51.53 billion (50.7% of $101.74 billion).

Constraints:

India’s electronics manufacturing capacity (20% of global iPhones) needs upscaling.

Challenges: India’s trade deficit ($85.09 billion in FY24) reflects reliance on CCP-occupied China’s electronics. Scaling domestic production is the solution and the government is actively working on it; critical minerals restrictions increase costs by 10-15%. But these challenges can be overcome by India and its people with concerted action. Particularly for Oppo, Vivo, and Xiaomi smartphones.

How CCP-Occupied China can reduce India’s Exports:

Iron Ore ($3.63 billion): Domestic mining or reduced steel production. Reduction: $2 billion (55%), limited by reserves.

Marine Products ($1.37 billion): Domestic aquaculture. Reduction: $1.1 billion (80%).

Petroleum Products ($1.16 billion): Domestic refining or energy efficiency. Reduction: $0.9 billion (78%).

Cotton, Copper, Aluminium, Diamonds ($1.59 billion): Domestic sourcing or reduced demand. Reduction: $1.3 billion (82%).

Engineering Goods, Chemicals ($3.88 billion): Domestic manufacturing. Reduction: $3.1 billion (80%).

Total: ~$8.4 billion (50.3% of $16.65 billion).

Constraints: Limited domestic mineral reserves, market access barriers.

3. CCP-Occupied China and United States Trade

What the U.S. Exports to CCP-Occupied China

Total exports: $143.5 billion (2024)

Agricultural Commodities (~$40 billion): Soybeans (~$16 billion): For animal feed, Other Agriculture (~$24 billion): Grains, meat.

Intermediate Goods (~$50 billion): Semiconductors and Equipment (~$20 billion): High-end chips, despite export controls. Machinery and Equipment (~$30 billion).

Consumer Goods (~$20 billion): Pharmaceuticals (~$10 billion). Automobiles (~$10 billion).

Services (~$33.5 billion): Travel, Business services (7% growth in 2022).

Defence Trade:

Restricted due to U.S. export controls (e.g. ITAR). Limited to dual-use technologies (e.g. aerospace parts, microchips) worth ~$1 billion, often rerouted via third countries.

What CCP-Occupied China Exports to the U.S.

Total exports: $438.9 billion (2024)

Electronics and Machinery (~$220 billion): Smartphones (~$39.5 billion, 9% of total): Apple iPhones, others criticised for IP theft and lower quality. Computers and Consumer Electronics (~$100 billion): Laptops, TVs, are substandard, Other Machinery (~$80.5 billion).

Manufactured Goods (~$150 billion): Textiles and Clothing (~$50 billion), Furniture and Toys (~$50 billion), Chemicals and Plastics (~$50 billion), High-Tech Products (~$60 billion), EV Batteries and Solar Panels (~$40 billion), Other High-Tech (~$20 billion).

Defence Trade:

Minimal direct arms exports due to U.S. restrictions. Dual-use goods (e.g., rare earth magnets, electronics) for defence applications, ~$2 billion. Export controls on critical minerals (e.g., gallium, germanium) since 2023 have impacted U.S. defence manufacturing, just as for India.

How the U.S. can reduce CCP-Occupied China’s Exports:

Electronics ($220 billion): Substandard smartphones, computers (e.g. IP theft, reliability issues) can be replaced by U.S. or Japanese production. Reduction: $110 billion (50%), limited by cost.

Textiles ($50 billion): Domestic manufacturing or reduced consumption. Reduction: $35 billion (70%).

Furniture and Toys ($50 billion): Domestic manufacturing or minimalism. Reduction: $40 billion (80%).

Chemicals ($50 billion): Domestic industry (e.g. Dow). Reduction: $40 billion (80%).

Defence Trade ($2 billion): Domestic (e.g. Lockheed Martin) or European suppliers. Reduction: $1.6 billion (80%).

Total: ~$226.6 billion (51.6% of $438.9 billion).

Constraints:

Electronics production scaling up, tariff-driven price hikes (U.S. tariffs at 30% post-May 2025). But Trump Administration is effectively dealing with these constraints.

How CCP-Occupied China Can Reduce U.S. Exports:

Soybeans ($16 billion): Domestic production or alternative feeds. Reduction: $8 billion (50%).

Other Agriculture ($10 billion, non-critical): Domestic grains, Meat. Reduction: $8 billion (80%).

Pharmaceuticals ($10 billion): Domestic generics. Reduction: $8 billion (80%).

Automobiles ($10 billion): Domestic brands (e.g. BYD). Reduction: $8 billion (80%).

Services ($20 billion, non-critical): Domestic providers. Reduction: $16 billion (80%).

Defence Trade ($1 billion): Domestic R&D or Russian alternatives. Reduction: $0.4 billion (40%).

Total: ~$48.4 billion (33.7% of $143.5 billion).

Constraints: Agricultural land, pharmaceutical quality.

Conclusion:

CCP-Occupied China: Substituting chip imports domestically is difficult as it not only requires massive investment (e.g. $100 billion for the semiconductor sector) but also original research efforts. Agricultural substitution is limited by land and water.

India: Electronics substitution (e.g. replacing Xiaomi, Oppo, Vivo) is being vigorously pursued (India produces >20% of iPhones as of date, Samsung, Micromax, Lava). Critical minerals restrictions increase costs, but the government is vigorously pursuing the processing of rare earths in mission mode.

U.S.: While tariffs act as a provisional measure, the Trump Administration is determined to pursue the onshoring of manufacturing. Rare earth export bans by the CCP threaten defence supply chains but the Trump Administration is sharply focused on self-reliance in rare earths and lithium, etc.

The global economic order is poised for a complete reset. Very interesting and crucial times ahead.