January 15th – Tom Foday, a scholar on East Asian issues and an analyst in politics and international relations from the United Kingdom, published an article on the website “Russia Today”.
He said that China has become the cornerstone of the global economy, and its unique trade advantage cannot be replicated in the short term.
Foday began by noting that although the Trump administration tried to transfer China’s supply chain back to the United States or other countries, China’s position in global trade was not affected.
China’s supply chain is competitive in price, more resilient, more connected and supported by local demand. Even if some countries are regarded as alternative options, China’s advantages cannot be replicated in the short term.
“The supply chain is not a wooden house that can be built casually.” Foday said that “chain” means that a series of factories, suppliers, cooperative enterprises, assembly lines and infrastructure are needed to form a network concentrated in a geographical area.
“This network is not automatically formed, but interdependent.” Affordability, reliability and efficiency are all key to building a successful supply chain.” He said, “This supply chain should be composed of a large number of nearby enterprises. Globally, China dominates most of it.
Foday then analyzed China’s obvious characteristics in the supply chain from three aspects: first, China’s geographical size and population make it have a large labor force and competitive infrastructure, and the price is more acceptable; second, China’s market size and cost advantages mean that domestic demand is high and enterprises are easy.
Generate profits; third, China has become a global trade and business center for decades, and its position will continue to be consolidated. In Foddy’s view, these advantages are a “win-win” situation for enterprises.
“Although there are always people who say that they want to decouple from China and transfer the supply chain, this has never happened. This is not surprising at all.
Fodi commented that China’s advantages in the supply chain come from stronger competitiveness, and large-scale projects such as Belt and Road cooperation and China-EU trains have played a strengthening role.
Western producers have never left China precisely because the Chinese market is so attractive.
Fody concluded that the business model between China and the United States has not changed at all.” China remains a central part of the global supply chain…because there is no comparable opponent or other choice at all.” Foday concluded, “The underlying supply chain is affordability, geography and convenience, not political preference.”