China remains stabilizer for global supply chain
Thirty-two automotive
wire and cable manufacturers in east China’s Shandong province recently
received a letter of thanks from South Korea, which praised their effectiveness
in production resumption amid the novel coronavirus (COVID-19) epidemic. The
letter reflected China’s deep integration into the global industrial chain.
Wires and cables are very
important automobile parts. More than 90 percent of wire and cable suppliers of
South Korean automobile manufacturers are located in Shandong. Therefore, their
resumption of production is of vital importance for the auto industry in South
Korea.
The COVID-19 epidemic had
brought about short-term challenges to China’s manufacturing industry in the
early stages of the outbreak and temporarily interrupted the global supply
chain. However, as enterprises have speeded up resumption of work, China’s
export sector is projected to return to normal and even bounce back to make up
for the losses caused by the suspension of production and impeded logistics.
China will remain the
stabilizer of the global supply chain.
At present, Chinese
governments at various levels have rolled out a package of policies to attract
and stabilize foreign investment, and spared no effort to help enterprises
restart production.
The Chinese governments
have also endeavored to efficiently guarantee a stable supply chain, prioritize
production resumption of leading foreign-funded companies and supporting
businesses on important position of the global supply chain, and actively
coordinate and promote upstream and downstream enterprises in key industries to
resume work.
Foreign trade companies
in China are accelerating resumption of production and improving their
capability to fulfill contracts signed before the COVID-19 epidemic, Li
Xingqian, director of foreign trade department under the Ministry of Commerce
told a news briefing on March 13.
Supported by the
government's policies, nearly all major foreign trade firms in Zhejiang and Jiangsu
provinces and Shanghai have resumed production, according to Li. As a result,
the global supply of important materials has been effectively guaranteed and
the safety and stability of the global supply chain has been ensured to the maximum.
In addition, Chinese
enterprises have played an active role in ensuring the reopening of
overseas-contracted projects and the supply of materials, helping foreign
suppliers resume production capacity, promoting upstream and downstream
enterprises to resume normal operation and stabilizing the global supply chain.
The COVID-19 epidemic
once again shows that China and the world are economically interdependent. It
also fully demonstrates the resilience of China's supply chain and its unique
position in the global industry.
By accelerating
resumption of production amid challenges, Chinese enterprises have not only
effectively alleviated the panic of the world market about the risk of supply
chain disruption, but also consolidated their role of "stabilizer" in
the global supply chain.
As the COVID-19 epidemic
is gradually subdued in China, the market panic decreased. China still remains
the most important destination for the majority of foreign-funded companies,
who are always confident in investing in China and have not changed their
investment strategies.
The annual China Business
Climate Survey released by the American Chamber of Commerce in China on March
10 found that less than 20 percent of member companies have transferred or are
considering moving their production capacity out of China – a percentage that
has been declining in the recent three years. The figure indicates the
impossibility of massive relocation of supply chains from China.
China's timely and
efficient resumption of production effectively guarantees the smooth and
orderly progress of international trade and production capacity cooperation,
highlighting the country’s important role of "world factory" and a
global supplier.
China's proportion of
global exports rose to 10.6 percent in 2018 from 4.8 percent in 2003, and its
proportion of the value added of global manufacturing increased to 30 percent
from 8.4 percent in the same period. The importance of major export products,
including electronic products, computers and communication equipment in the
global supply chain has risen significantly.
The impact of the
epidemic on China's supply chain is temporary and phased. China is working hard
to stabilize the fundamentals of foreign investment and foreign trade,
coordinate relevant departments to ensure supplies to foreign companies in
terms of materials, labor, water and power, and logistics, so as to quickly and
effectively resume supply for production.
In the long run, with the
support of a series of policies, the self-repairing ability of China's supply
chain is continuously improving, and its indispensable position in the world
will not be changed by the impact of the epidemic.
Source: People’s Daily
Overseas Edition
A worker of a company in
the China (Hebei) Pilot Free Trade Zone in Zhengding area of Shijiazhuang,
north China’s Hebei province operates a robot, Feb. 27. The company is working
hard to complete orders placed by high-end smart equipment manufacturers in the
U.S. and Germany. Wu Zhiwei/People’s Daily Online
China remains stabilizer for global supply chain
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