A “global industrial rebalance” refers to a recent relocation of some energy-intensive industries from China to technologically more advanced countries. This is a reversal of the trend of several decades, which has resulted in a global concentration of energy-intensive manufacturing in China, notably steel, cement, aluminum, paper and glass. In this article, I argue that such a global industrial rebalance would benefit both China and the world. The relocation of energy-intensive production is also economically viable, as illustrated by a number of recent investments in the U.S. by Chinese firms in those industries.
As a global powerhouse in manufacturing, China now produces more steel, aluminium, glass and cement than the rest of the world combined (Fig. 1). The global concentration of energy-intensive manufacturing has been at the center of China's rapid industrialization and its positioning as the world's factory in the course of recent decades, as well as the deindustrialization that has concurrently occurred in many western countries.