Abstract: For the past twenty years, manufacturers have been outsourcing their
production to China to take advantage of low labor costs. From years of
experience, companies have implemented and redesigned systems to be the most
effective and cost efficient, which has led to increased dependence on
interconnected supply chains that are vulnerable to associated risks. US
companies are recognizing the risks and starting to mitigate the risk as the
impact becomes greater and more probable. This paper discusses the outcomes and
impacts of the occurrence of major supply chain risks from both a macro and
micro point of view. A diagram outlining risks associated with Chinese trade is
also included. The macro-level addresses the actions the US government – and
the country as a whole – must take to maintain a viable relationship with
China. On the micro-level, the analysis is presented on the most relevant risk
management options. A risk mitigation prescriptive business model that covers
both macro and micro views is also presented. The discussion is limited to the
most relevant issues facing the United States when it comes to trading with
China. It is also known that information reported on China is not always
accurate or representative of reality. To offset this fact, broad research from
various sources has been conducted to present an acceptable range of data. This study augments the nascent research on the potential outcomes of risks
occurring in the China supply chain, and makes a case that risks are not only
probable, but that the outcomes are acute.
