Temporary disruptions will not hamper nation’s key role in global supply chains
China’s key role in global supply and industrial chains will not be altered due to the temporary disruptions from the novel coronavirus epidemic, said officials and global business leaders.
At present, there is no large-scale transfer of supply and industrial chains to foreign countries due to the outbreak, said Zong Changqing, director-general of the department of foreign investment administration under the Ministry of Commerce.
“Fundamentals of China’s long-term economic development and its competitive advantage in attracting foreign capital have not changed,” said Zong, adding that most of the multinational firms are confident about prospects in the country and have not altered their investment strategy.
The government has released a number of measures to help both domestic and global companies resolve issues such as work resumption, logistics, gathering sufficient production material, and items for epidemic prevention and control to restore their earnings strength.
Volkmar Denner, chief executive officer of Bosch Group, said most of the company’s China plants are ramping up operations again, while also taking precautionary measures to ensure associates’ safety. Bosch believes that the impact on the Chinese economy will only be temporary.
“Once China recovers, we have full confidence that it will continue to develop sustainably,” he said.
Supported by over 60,000 employees in China, the German industrial conglomerate will put its first innovation and software center outside Germany into operation in Wuxi, East China’s Jiangsu province, in mid-2020.
Li Xingqian, director-general of the department of foreign trade under the Ministry of Commerce, reiterated that China is an important link in the global supply chain for many multinational companies.
“The impact of the epidemic on the supply chain in the area of foreign trade mainly occurred in material supply and product assembly. Export-oriented firms have encountered temporary difficulties,” he said. “However, its influence is regional, limited and fully controllable.”
The work resumption rate of China’s machinery manufacturers reached 71.89 percent by Thursday, data from Beijing-based China Machinery Industry Federation showed.
The country’s foreign trade development has been backed by resilience and ample space for innovation. With successive policies related to foreign trade stabilization, more favorable conditions will be created to enrich the nation’s industrial chain in supporting foreign trade, Li said.
Li’s view is shared by Honson To, chairman for China and Asia-Pacific at KPMG. He said after more than four decades of rapid growth, China has a solid industrial foundation, complete industrial chain and high-quality labor force, which cannot be replaced by any other economy in the world.
Apple CEO Tim Cook said in an interview with Fox Business earlier this week that China is getting the epidemic under control and he was optimistic about the company’s prospects.
“On the supplier side, we have suppliers－you know, iPhone is built everywhere in the world. We have key components coming from the United States, we have key parts that are in China, and so on and so forth,” said Cook.
“When you look at the parts that are done in China, we have reopened factories, so that the factories are able to work properly,” he said.
Wei Jianguo, former vice-minister of commerce, said the outbreak has no national borders and countries such as South Korea and Japan are also fighting the virus, which would mean further disruptions to the global supply chain.