Geopolitical Economy and Supply Chain Restructuring: Mechanisms and Pathways of Regionalization

Yunyi Gong ()
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Yunyi Gong: East China University of Science and Technology, School of Foreign Languages

A chapter in Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026), 2026, pp 129-142 from Springer

Abstract: Abstract Amid intensifying geopolitical competition and recurrent global crises, global supply chains are shifting from an “efficiency first” toward a “security first” orientation. This article examines the internal logic of geopolitically driven supply chain regionalization by integrating Global Value Chain Theory with perspectives from geopolitical economy. The study identifies four principal driving factors: strategic competition among major powers, exposure of systemic risk, domestic political pressure, and technological change. It demonstrates how three intermediary mechanisms—industrial policy that reshapes the institutional environment, corporate risk management that updates managerial cognition, and friend-shoring that redefines location criteria—translate macro-level geopolitical pressures into micro-level firm decisions. A comparative analysis of the Asia Pacific, Europe, and North America reveals that regionalization does not amount to uniform deglobalization; rather, it produces three differentiated patterns: competition driven fragmentation, crisis driven autonomy, and institution driven agglomeration, yielding a hybrid configuration of regional fortresses alongside continued global linkages. Theoretically, the article challenges the political neutrality assumption of traditional Global Value Chain Theory by proposing a mid-level framework of geopolitics, institutional constraints, and firm response that explicates the causal chain linking power politics to the geographical reconfiguration of production networks. Practically, the findings offer systematic guidance for firms to design layered supply chain strategies and modular, reconfigurable networks that balance efficiency and resilience, and they provide new analytical lenses for assessing the evolving global division of labor.

Keywords: Supply Chain Regionalization; Geopolitical Economy; Friend-shoring; Supply Chain Resilience; Global Value Chain Restructuring (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-701-9_14

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DOI: 10.2991/978-94-6239-701-9_14

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