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We establish the physical origins of chemical transferability from the perspective of the nearsightedness of electronic matter. To do this, we explicitly evaluate the response of electron density to a change in the system, at constant chemical potential, by computing the softness kernel, s(r, r'). The softness kernel is nearsighted, indicating that under constant-chemical-potential conditions like dilute solutions changing the composition of the molecule at r has only local effects and does not have any significant impact on the reactivity at positions r' far away from point r. This locality principle elucidates the transferability of functional groups in chemistry. [ABSTRACT FROM AUTHOR]