38 BEIJING REVIEW MARCH 12, 2020 http://www.bjreview.com
BUSINESS MARKET WATCH
T
he novel coronavirus outbreak is
unlikely to shatter China’s role in the
international supply chain in an in-
creasingly interconnected world economy as
the country continues to make headway in
containing the virus.
Although epidemic control measures
have slowed production and logistics for
some companies in China, the largest
source of imports to 65 countries worldwide,
analysts and industry insiders said shifting
production out of China won’t be a cost-
effective option.
“I think in some sectors, companies are
very dependent on China. There’s no such
thing as shifting the supply chain,” Nicholas
Lardy, a senior fellow at the Washington, D.C.-
based Peterson Institute for International
Economics, said.
China is a world-leading sales and logis-
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chain clusters, making it a go-to supplier
for global enterprises, according to Yang
Daqing, a researcher with the China Society
of Logistics.
The outbreak will not damage China’s
leading role in the global supply chain,
Lenovo CEO Yang Yuanqing said, adding that
the 33 Lenovo plants around the world are
working to maintain stable supply.
Addressing concerns over disruptions to
the global auto supply chain, Mike Hawes,
Chief Executive of the Society of Motor
Manufacturers and Traders in the UK, said it
is too early for any judgment while any possi-
ble production bottleneck warrants attention
given the level of complexity and integration
of the supply chain.
Hawes said his organization would keep
an eye on the developments of the out-
break, while manufacturers make necessary
adjustments to keep supply from hitting the
brakes.
The impact on China’s supply chain
will come in stages depending on how fast
the outbreak is contained, Xu Qiyuan, a re-
searcher with the Chinese Academy of Social
Sciences, said.
If the epidemic is brought under control
before the export orders spike in March and
April, industries in China will hardly feel the
pinch. Any development past that, however,
may hit export and cause deeper disruptions,
Xu said.
The overall tally of new cases of
confirmed novel coronavirus infection na-
tionwide has gradually declined, with new
cases outside Hubei Province, the epicenter
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World Health Organization (WHO)Director General Tedros Adhanom
Ghebreyesus said on February 24 that
COVID-19 can be contained, based upon the
findings by the WHO-China joint mission in
China.
China has ratcheted up efforts to help
companies resume production, arranging
chartered trains to ferry workers from their
hometowns to manufacturing hubs such as
Guangdong, Zhejiang and Shanghai.
Factories of companies like Tesla and
FAW-Volkswagen Automobile have resumed
production, while the American manufactur-
er Honeywell said 18 of its 21 plants in China
are working at full capacity.
The evolution of China’s role in the sup-
ply chain has never been easy, Yang Daqing
said. He said the coronavirus outbreak would
upgrade it further to feature a better contin-
gency system against various risks.
The country may move up the global
value chain after the epidemic with possible
breakthroughs in sectors like artificial intel-
ligence, industrial and civil robotics, 5G and
medical care, Fu Xiaolan, founding Director
of the Technology and Management Center
for Development at Oxford University, said.
Epidemic-driven demand for telework-
ing, long-distance medicare and online
education will help boost sales for data stor-
age services, according to Lenovo’s Yang.
“China will rebound rapidly after the
novel coronavirus outbreak burns itself
out because we are talking about a huge
economy that is essential to the world’s
supply chain,” Tan Kok Wai, the Malaysian
Government’s special envoy to China, said. QThis is an edited version of an article published by Xinhua
News Agency
Copyedited by Sudeshna Sarkar
Comments to [email protected]China’s Supply Chain Able to Withstand
Novel Coronavirus Storm
“I think in some sectors, companies are very
dependent on China. There’s no such thing as
shifting the supply chain.”
—Nicholas Lardy, a senior fellow at the Washington, D.C.-based Peterson Institute for
International Economics