Nation Strives to Safeguard Global Supply Chains

An employee works on the production line of a foreign-funded machinery manufacturer in Suzhou, Jiangsu province. Zhai Huiyong/For China Daily

Xi: Country opposed to politicizing, weaponizing economic and trade ties, sci-tech exchanges

China's recent emphasis on safeguarding global supply chains highlights the urgency and vital importance of deeper international cooperation in key fields, as the world struggles with disruptions in sectors such as semiconductors, energy and food as well as other industrial chain challenges, experts said.

Amid the global economic downturn and geopolitical uncertainties, China has made it clear that any attempts to sever supply chains will harm the world, and the country will continue to play an important and positive role in stabilizing global industrial chains, they added.

During his meetings with leaders of a number of countries on Indonesia's resort island of Bali earlier this month, President Xi Jinping called for more efforts to stabilize global industrial and supply chains. Among the leaders he met during the G20 Summit were US President Joe Biden, Republic of Korea President Yoon Suk-yeol and Dutch Prime Minister Mark Rutte.

During their discussions, Xi said that starting a trade or technology war, building walls and barriers, and pushing for decoupling and severing supply chains all run counter to the principles of a market economy and undermine international trade rules.

He reiterated Beijing's opposition to politicizing and weaponizing economic and trade ties as well as exchanges in science and technology, saying that such attempts serve no one's interests.

Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said: "The remarks send a strong message that the world is a community where all countries need to cooperate rather than decouple from one another. They show that China is a responsible country amid challenges."

The discussions bear particular importance, as they came after the US government imposed a series of well-calculated restrictions or controls on exports of advanced semiconductor technology to China. Washington is also pressuring other countries, such as the Republic of Korea, Japan and the Netherlands, which are major players in the global semiconductor sector, to adopt similar chip restrictions on China.

"Direct communication with leaders of the countries concerned can clarify the strategic intentions, and clearly express the message that any attempts to exclude China from industrial chains will impede global economic recovery," said Zhang Tengjun, deputy director of the China Institute of International Studies' Department for Asia-Pacific Studies.

According to Zhang, that is in line with the outlook of many Asian countries. "During the meeting with his South Korean counterpart, President Xi stressed the need to deepen cooperation in areas such as high-tech manufacturing. The two economies are highly complementary and there is no conflict of fundamental interests between the two sides," Zhang added.

The Netherlands has also displayed its intention to resist US calls to ban chip equipment sales to China. On Tuesday, Dutch Foreign Trade Minister Liesje Schreinemacher told lawmakers that the Netherlands will make its own decision regarding Dutch company ASML's chip gear sales to China amid trade rule talks with the US and other allies, Bloomberg reported.

ASML dominates the market for one-of-a-kind, cutting-edge chipmaking equipment, such as ultraviolet lithography machines, that has become a focus of the US government's attempts to limit trade with China.

"If we put that in an EU basket and negotiate with the US and in the end, it turns out (that) we give away deep ultraviolet lithography machines to the US, we are worse off," Schreinemacher said.

Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, said that in the past two years, countries have deeply felt the pain of disruptions in industrial chains, with chip shortage, poor logistics, as well as food and energy crises affecting enterprises and consumers globally.

"Amid such a context, it is particularly urgent to maintain the stability of global supply chains," Wang said, adding that some countries' attempts to politicize normal business ties will harm their own interests.

A case in point is that staff at the UK's largest microchip factory have urged Grant Shapps, the UK secretary of state for business, energy and industrial strategy, to reverse his decision to force its Chinese owners to sell their majority stake.

The staff association at Newport Wafer Fab sent a letter to Shapps on Monday to argue that their livelihoods had been placed at risk after he ordered last week that Nexperia, which is owned by Chinese company Wingtech, must sell at least 86 percent of its stake in the plant due to alleged national security concerns, Sky News reported.

Despite such disruptions and headwinds, China has been working hard to maintain the resilience and stability of its supply chains, experts said.

Denis Depoux, global managing director of consultancy Roland Berger, said China's supply chains have improved, as Chinese and foreign companies invested heavily to modernize their production systems in 2021, when most of the global manufacturing sector was still badly hit by disruptions related to COVID-19.

"The continuous surge in Chinese exports, even in 2022 so far, demonstrates this resilience and competitiveness," he said.