China provides stability to global industrial chain amid COVID-19 economic impact

SINGAPORE (XINHUA) – China’s effective handling of the COVID-19 crisis has provided stability to the global industrial chain amid economic disruptions, a Singaporean economics scholar has said.

An associate professor of the Lee Kuan Yew School of Public Policy at the National University of Singapore Gu Qingyang told Xinhua in a recent interview that the COVID-19 pandemic has caused a great impact on the global supply chain.

“China occupies a central position in the global industrial chain and supply chain, so the impact of this supply chain shock on China is of great concern,” Gu said.

A mass exodus of global supply chain from China is unlikely in the short term, he noted. China has the world’s most complete industrial supporting system and ecological system, abundant financing ability, a large number of high-quality workforce, and increasing scientific and technological innovation ability, he said.

In recent years, the external environment for China’s development has changed fundamentally, Gu pointed out. While external changes are difficult for China to control, internal reform and development can be controlled, which is the basis for China’s global positioning in the future, he said.

Employees work on a car assembly line at the Dongfeng Honda Automobile Co Ltd factory in Wuhan. PHOTO: AP

International political interference will affect the layout of global industrial chain and supply chain in China in the short term, but in the long run, it all depends on China’s domestic appeal, said the scholar.

China’s supply chain, service chain and value chain system formed around the industrial chain is the most complete in the world, he said, adding this unique industrial ecosystem has strong magnetism to attract multinational companies.

China has effectively tackled the COVID-19 crisis and demonstrated strong execution, providing stability and security for the normal operation of industrial chain and supply chain, he said.

He further noted that China, by virtue of its advantages in industrial chain and supply chain, has provided a large number of anti-epidemic materials to international organisations and over 100 countries.

This shows the importance of globalisation and global supply chain, and the international community can use global supply chain to cross-support in times of crisis, Gu noted.

In addition, isolation measures adopted worldwide have also given birth to some new forms of business, and are bound to stimulate the innovation of global industrial chain and supply chain, the expert said.

He expounded the idea by saying that people can enhance the coordination of global supply chain through telecommunication, cross-border e-commerce and cloud services.

China’s emerging infrastructure construction with 5G technology, big data and artificial intelligence (AI) as the core will provide important support for the new industrial chain and supply chain, he added.

To extend China’s industrial chain layout, Gu suggested that China could cooperate with northeast Asia and southeast Asia to form regional industrial integration.

Meanwhile, in addition to building supply chains with Europe and the United States (US) as much as possible, it is also important to integrate industries and supply chains in countries along the Belt and Road, he said.