The economic boom after World War II led to the emergence of a new trend in the global economy, where countries became increasingly connected through the cross-border flow of people, goods, information, and ideas.

Growing interconnectedness between countries and regions blurred the line between domestic and foreign policies. This new phenomenon, called ” interdependence,” is “the growing sensitivity in economic transactions between two or more nations to economic developments within those nations” (Cooper, 1972, p. 159).

To Cooper, economic interdependence implies a two-way sensitivity between nations, meaning one nation cannot enjoy benefits from growing interconnectedness without exposing itself to a certain degree of dependence.

Keohane and Nye further strengthened the concept of “complex interdependence,” which they described as a fragmented polity where growing interdependence between states diffused power and leveled hierarchy in international relations (Keohane & Nye, 2012).

With more players and connections, varying issues and states’ goals, shifts emerged in the power distribution while military power no longer enjoys dominant position.

Even though Keohane and Nye acknowledged that complex interdependence led to increased sensitivity and vulnerability, they asserted that countries attempting to manipulate interconnectedness for their benefits would face particular challenges, such as the constraints of international norms or implications to their dependence (Keohane & Nye, 2012).

Complex interdependence also has its detractors. In documenting how Nazi Germany manipulated interdependence from foreign trade, Hirschman emphasized that in an interdependent relationship, while both sides would be affected in case of dispute, some would lose more than the other (Hirschman, 1945). This asymmetric vulnerability occurs when one side gains disproportionate leverage over the others and is the source for friction (Wright, 2013).

Complex interdependence also creates and enforces enduring power asymmetry (Farrell & Newman, 2019). Commercial pursuit of efficacy and market power creates self-reinforcing network topologies, where certain actors are located at the center of the network, possessing a higher level of connection and enjoying a greater degree of dependency from other players (Farrell & Newman, 2019).

In this case, certain states can weaponize the global networks for their benefits, with the support of network structures and their domestic institutions, by gleaning critical knowledge from information flows (panopticon effect) or deny access to the hub for third parties (chokepoint effect).

Even though Darrell and Newman used the U.S. dominance in financial and communication networks as an example, their theory can also be applied to the concentration of supply chains.

Supply chains emerged during the New Globalization, in which ICR revolution in the 1990s lowered communication costs significantly, thus facilitating the global dispersion of manufacturing previously tied to consumer markets (Baldwin, 2016).

Offshoring and supply chains transformed the nature of trade and comparative advantages among nations and facilitated the great transfer of know-how and economic prosperity from developed nations to a small group of developing countries.

More and more industries adopted highly integrated global supply chains to maximize comparative advantages of many production locations and allocate scarce resources more efficiently (Abe & Ye, 2013; Henderson & Nadvi, 2011).

This trend also increased the complexity of supply chains, leading to systemic risks, where risks from one node of the production process spread to the entire system (Haraguchi & Lall, 2014).

The impact of supply chain disruption is rarely one-dimensional since it affects not only suppliers but also the government, financial institutions and consumer markets. A typical cause is natural disasters.

For instance, the Thailand floods and the East Japan earthquake and tsunami in 2011 unleashed severe and widespread damage to manufacturing plants, resulting in a shortage of critical parts and components in many industries, such as specialty paint and microcontrollers for the automobile industry, forcing manufacturers to cease operation or reduce capacity at other plants (Congressional Research Service, 2011).

Stalled production also pushed down national GDP and led to price increase, for example desktop and mobile hard disk drive produced in Thailand (Kajitani, Chang, & Tatano, 2013; Haraguchi & Lall, 2014).

Scholarship on asymmetric interdependence has so far focused on the impact of this phenomenon in sectors like trade and energy, and to a certain extent, finance and communication.

Simultaneously, information and communication technology, wage gap, trade and transportation costs were identified as factors shaping supply chains (Baldwin, 2012).

This paper attempts to connect two sets of scholarship by adding a political dimension, arguing that the overconcentration of supply chains in China represents a form of asymmetric interdependence, which can be weaponized in political disputes or to achieve strategic gains.