China advocates Global Supply Chain collaboration, opposes protectionism at CISCE

Chinese Premier Li Qiang asserted on Tuesday that China opposes protectionism and is eager to enhance supply chain collaboration with all nations. This statement comes amid increasing global concerns about the reliance of many countries on China for their supply chains.

Over the past year, calls from the United States and the European Union have intensified, urging a reduction in dependence on China in specific sectors and efforts to mitigate risks in their supply chains, including restricting Chinese enterprises’ access to advanced semiconductors.

Speaking at the first China International Supply Chain Expo (CISCE), Premier Li expressed China’s willingness to establish closer production and industrial supply chain partnerships with countries worldwide. He emphasized the need for the international community to be vigilant about the challenges and risks arising from protectionism and uncontrolled globalization.

Growing geopolitical tensions, such as Russia’s conflict in Ukraine and concerns about a potential Chinese invasion of Taiwan, have prompted an increasing number of foreign businesses to reconsider expanding their supply chains in China. Instead, they are directing investments toward countries like India, Mexico, and Vietnam, which have stronger ties with the United States—a strategy referred to as China-plus-one.
Organized by the state-run China Council for the Promotion of International Trade (CCPIT), the expo represents Beijing’s latest effort to attract foreign investment, especially as China has seen a historic drop in such investments. The value of announced U.S. and European greenfield investment into China decreased to less than $20 billion last year, down from a peak of $120 billion in 2018, according to Rhodium Group. In contrast, investment in India surged by approximately $65 billion or 400% between 2021 and 2022.

Despite the decline, China remains an attractive option. A survey by HSBC at the China International Import Expo (CIIE) revealed that 45% of firms expect to expand their supply chains in China over the next year.

While acknowledging the concerns, some experts argue that the measures being considered by the EU and the U.S. may not match the scale of the perceived risks. The recent improvement in U.S.-Sino relations, evident in meetings between Chinese President Xi Jinping and U.S. President Joe Biden, as well as participation in the Asia-Pacific Economic Cooperation (APEC) Summit, is expected to strengthen China’s position as a key manufacturing hub.

Zhang Shaogang, a CCPIT official, highlighted that 20% of the foreign firms exhibiting at the supply chain expo were U.S.-based, including major companies like Amazon, Apple, Tesla, and Intel. He expressed hope that U.S. businesses would actively contribute to the healthy, stable, and long-term development of U.S.-China relations while pursuing their own development goals.

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