How would shifting manufacturing from China to Indonesia or India impact human health and social economy?

The COVID-19 pandemic is reshaping the global trade and supply chains, and some developed countries may consider relocating strategic manufacturing operations out of China, providing new opportunities for some South and Southeast Asian countries. Since the shift of manufacturing is accompanied by redistribution of emission sources of air pollutants, the impacts on environment and human health of the countries directly involved and their neighbors, should be considered. We used the Community Earth System Model, the Integrated Exposure-Response (IER) model and Willingness To Pay (WTP) method, to simulate fine particulate matter (PM_2.5) and the socio-economic responses to shifting manufacturing from China to Indonesia or India. Our results show that significant effects on PM_2.5 related mortality and economic cost for these deaths were seen in many East, Southeast and South Asian countries, particularly those immediately downwind of these three countries. Transferring all of export-related manufacturing to Indonesia resulted in significant mortality decreases in China and South Korea by around 78k (5 per 100k) and 1k (2 per 100k) respectively, while Indonesia’s mortality significantly increased (73.7k; 29 per 100k), as well as India, Pakistan and Nepal. When manufacturing was transferred to India, mortality rates in East Asia show similar responses to the Indonesian scenario, while mortalities in India increased dramatically by 87.9k (6 per 100k), and mortalities in many neighbors of India also severely increased. Shifting manufacturing to India in our simulations led to more Asian countries showing significant changes in PM_2.5 related deaths and economic costs than an equivalent shift to Indonesia. This is because of the maritime Indonesian setting as well as patterns of surface winds. Nevertheless, the economic costs for these deaths were much smaller than national GDP changes in China (0.9% of GDP vs. 18.3% of GDP), India (2.7% of GDP vs. 84.3% of GDP) or Indonesia (9.4% of GDP vs. 337% of GDP) due to shifting all of export-related production lines from China to India or Indonesia. Perhaps the most concerning aspect of this study is the damage to “innocent” victims of any manufacturing shifts in third countries that do not see any domestic economic gains. Morally, part of the benefits of economic activity should be used to compensate the neighboring communities where mortality increases occur.