More independent, controllable links to guard against risks, aid global economy
Building more independent and controllable industrial and supply
chains will help China better cope with short-term risks amid the
COVID-19 pandemic and deeply participate in the reconstruction of global
supply chains for long-term benefits, experts and company executives
said on Monday.
The comments came after the annual tone-setting Central Economic Work
Conference, which concluded on Friday in Beijing, outlined key tasks
for next year in eight aspects, including efforts to improve industrial
and supply chains to create a more independent and controllable
Qin Hailin, president of the China Center for Information Industry
Development Consultancy, a Beijing-based consultancy, said as the global
economy still faces uncertainties amid the pandemic, a more
independent, resilient and flexible industrial chain is an important
foundation for the growth of China's economy.
"As international situations change and each country places more
emphasis on supply chain management, the global industrial chain is
being reconstructed, which offers an opportunity for China to better
participate in the formulation of international rules," Qin said, adding
that better industrial chain structure is also an inherent requirement
of China's efforts to move toward high-quality economic development.
Eyeing the weak areas of industries, the conference also said China
will ensure the better implementation of key projects targeting
breakthroughs in key technologies and solutions to bottleneck problems
while encouraging businesses to focus on their areas of strength and
forge new cutting-edge technologies.
Like Aobo, executive deputy director of the Academic Center for
Chinese Economic Practice and Thinking at Tsinghua University, said
improving China's industrial chain is not just to cushion the outbreak's
fallout on manufacturing, but a foundation for the nation to better
pursue the new dual-circulation development pattern that has the
domestic market as the mainstay with the domestic and foreign markets
boosting each other.
"The risks of the manufacturing supply chains are mainly derived from
the fact that some developed countries aim to contain China's
technological development in the face of our economic rise. Such a
pattern will not change in the short term," he said.
The United States government, for instance, has put dozens of Chinese
tech companies, including Huawei Technologies Co and Semiconductor
Manufacturing International Corp, on an entity list, which restricts
their access to advanced US technologies such as crucial software and
"This means that the latecomer advantage of leveraging some of the
most advanced international technologies to fuel our own rapid
development no longer exists. We have to change our mindset and beef up
our industrial chain capabilities," he said.
But experts also said that intensified efforts to pursue homegrown
breakthroughs in crucial technologies are not the same as seeking
self-sufficiency or an isolation from the global supply chain.
"It does not mean to localize all components and technologies.
Instead, China only focuses on bolstering its capabilities in key
technologies, and more efforts will be made to embrace the globalization
of other industrial parts and technologies," Qin, from China Center for
Information Industry Development Consultancy, added.
Wang Youxin, a researcher at a research institute of the Bank of
China, said more efforts are needed to continue optimizing the business
environment, reducing barriers for market entry and attracting the
inflow of foreign capital, so as to avoid the disorderly outflow of key
links in the industrial chain.
"Cooperative mechanisms can also be established for upstream and
downstream enterprises in industrial chains, to ensure the smooth
operation of the domestic and foreign companies in China," Wang said.
Zhao Juntao, president of Swedish telecom equipment maker Ericsson's
China branch, said earlier this year that before the pandemic, China had
already become a crucial node in the global supply chain after 40 years
"The epidemic has once again made us realize how important China's
position is," Zhao said, adding that the nation's important role in the
global supply chains will continue for a long time for many reasons,
including its manufacturing foundation and its market size.
Yang Yuanqing, chairman and CEO of Lenovo Group Ltd, said China
already has the world's largest industrial system and efforts to boost
the modernization level of industrial chains will help China become a
smart manufacturing powerhouse.