Europe and the US would need to invest an extra $23.6tn over the next 25 years to end reliance on China in critical sectors, according to EY‑Parthenon. The analysis puts the cost at $13.7tn for the US, $9.1tn for the Eurozone and $800bn for the UK by 2050. At $550bn a year, the US would have to match the scale of current tech data‑centre spending, while the EU would need to almost double its annual budget to replicate Chinese infrastructure, research and supply chains.

Mats Persson, a former Downing Street adviser now at EY‑Parthenon, says the annual outlay of roughly $940bn over 25 years is “not insurmountable” but must be added to existing energy, defence and tech investments. The report warns that even with massive spending, short‑term decoupling is unlikely due to China’s control of rare earths, lithium, cobalt and pharmaceutical ingredients, noted Natixis chief economist Alicia García‑Herrero.

Higher costs would push up prices in the West, with Europe potentially seeing 1‑2.5% inflationary pressure in key sectors, keeping the ECB and Bank of England above target. Persson suggests “partial decoupling” and selective investment as a more realistic path forward.