Uncertainty and Renminbi Exchange Rate Risk: Implications for Global Value Chain Restructuring

Uncertainty and Renminbi Exchange Rate Risk: Implications for Global Value Chain Restructuring

This research explores the profound impact of uncertainty and Renminbi exchange rate risk on the ongoing transformation of global value chains. By examining how these factors influence firms' decisions regarding offshoring, reshoring, and nearshoring, we shed light on the future landscape of international production networks.

Uncertainty encompasses a range of factors, including geopolitical instability, trade policy shifts, and technological advancements. These factors create volatility and unpredictability, making it challenging for firms to plan and manage their global operations.

Renminbi exchange rate risk is another crucial factor. Fluctuations in the value of the Renminbi can significantly impact the profitability of firms engaged in global value chains, especially those with operations in China.

The paper analyzes the following key questions:

• How do uncertainty and Renminbi exchange rate risk affect firms' decisions regarding offshoring, reshoring, and nearshoring?
• What are the implications of these decisions for the structure and competitiveness of global value chains?
• What strategies can firms adopt to mitigate the risks associated with uncertainty and exchange rate fluctuations?

By addressing these questions, the research provides valuable insights for policymakers, businesses, and academics interested in understanding the evolving dynamics of global production networks in the context of ongoing geopolitical and economic shifts.