Energy-Intensive Manufacturing in China vs. High-Energy Cost Economies: The competitive gap.

Answer

The competitive gap between low-cost and high-cost energy hubs is widening. In economies with high energy costs (like parts of the EU), manufacturing is becoming unviable for sectors like **chemicals, steel, and heavy machinery.**

Concerns identified by Munawar:

• Hollowing Out: When energy prices rise beyond a certain threshold, factories close and move. This is not just a loss of jobs, but a loss of industrial knowledge.
• Concentration: China's "Electricity Advantage" hubs are absorbing this displaced production, further strengthening their global monopoly.
• Structural Inflation: High-cost economies must import the products they can no longer make, leading to currency devaluation and structural inflation.

The gap forces a choice: socialize energy costs like China, or lose the industrial base entirely.