Supply Chain Expo: China Criticizes West's De-Risking Strategy

    Photo: Wikimedia Commons

    The Facts

    • At the opening ceremony of the first China International Supply Chain Expo on Tuesday, Chinese Premier Li Qiang said that the PRC opposes protectionism and intends to strengthen "industrial supply chain partnerships with all countries."

    • Li made these remarks in response to recommendations made over the past year by the US and the EU to "de-risk" their supply chains, lessen their reliance on China in specific industries, and cut off Chinese companies from some cutting-edge semiconductors.

    The Spin

    Pro-China narrative

    Beijing is working feverishly to offset the US and EU's de-risking initiatives and show international investors that China is a safe place to be. Due to the geopolitical difficulties surrounding Taiwan, Washington and Brussels have advised companies to locate their operations outside China. This policy is depressing both the value of the yuan and China's recovery from the pandemic. Beijing's ability to persuade international investors to come back is crucial to its future.

    Anti-China narrative

    While they're still present in China, foreign investors are pulling money from the country faster than they're putting it in. Many businesses, including Apple Inc., have experienced supply chain interruptions due to China's strict pandemic lockdowns, forcing them to diversify their supply chains by moving some production to India. Investing in China also comes with geopolitical risk, the threat of slower economic growth, and uncertainty regarding domestic policies.

    Nerd narrative

    There's a 67% chance that China's GDP will exceed US GDP in any year before 2041, according to the Metaculus prediction community.

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