Tensions over supply-chain decoupling between the United States and China are set to be at the forefront of discussions at a high-profile expo this week, as the presidential re-election of Donald Trump adds a greater sense of urgency to China’s long-standing focus on stabilising its supply chain.
Advertisement
With the China International Supply Chain Expo (CISCE) kicking off in Beijing on Tuesday, Trump’s promised reinforcement of tariffs, export controls and sanctions threaten China’s supply-chain dominance, and the stakes are especially rising for industries heavily integrated into US-China trade.
There is little doubt that US-China supply chains will only become “elongated”, said Xu Tianchen, senior China economist with the Economist Intelligence Unit (EIU).
“At a surface level, they are indeed decoupling, as China increasingly struggles to directly export final goods to the US,” Xu explained. “Yet, if we dig deeper, third countries are playing a more prominent role in sourcing Chinese inputs, processing locally and exporting final goods to the US.
“The content of ‘made in China’ may diminish, but that of ‘made by China’ – Chinese factories manufacturing in third party countries – will remain unshakeable.”
As the new round of US-China supply disruptions looms, the second CISCE, a state-backed event affirming China’s leading role in the global supply chain, has attracted more US participants, in an aim to explore how nations can adapt to the rapidly shifting global trade dynamics while ensuring stability in critical supply chains amid pressing challenges. It runs until Saturday.