Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

China’s Xi Wants to Diversify Supply Chains Amid U.S. Curbs

Published 11/01/2020, 10:04 PM
Updated 11/01/2020, 10:27 PM
© Bloomberg. A vessel loaded with shipping containers is docked at the Yangshan Deepwater Port in this aerial photograph taken in Shanghai, China, on Sunday, July 12, 2020. U.S. President Donald Trump said Friday a phase two trade deal with China isn't under consideration, saying the relationship between Washington and Beijing has deteriorated too much. Photographer: Qilai Shen/Bloomberg

© Bloomberg. A vessel loaded with shipping containers is docked at the Yangshan Deepwater Port in this aerial photograph taken in Shanghai, China, on Sunday, July 12, 2020. U.S. President Donald Trump said Friday a phase two trade deal with China isn't under consideration, saying the relationship between Washington and Beijing has deteriorated too much. Photographer: Qilai Shen/Bloomberg

(Bloomberg) -- Chinese President Xi Jinping called for setting up independent and controllable supply chains to ensure industrial and national security, just as the U.S. moves to cut China off from key exports.

“We must strive to to have at least one alternative source for key products and supply channels, to create a necessary industrial backup system,” Xi said in an April speech on the nation’s economic development that was only published Saturday by the Qiushi Journal, a publication of the ruling Communist Party. The magazine didn’t say why it had waited to release the remarks.

Xi said the impact of the coronavirus epidemic exposed hidden risks in China’s industrial and supply chains, without elaborating, thus necessitating “independent, controllable, safe, and reliable” chains.

Beijing last week outlined strategies for greater self-sufficiency as it unveiled its five-year economic plan after a plenum of top leaders and as tensions with the U.S. intensify. The U.S. has pressured allies to shun equipment from Huawei Technologies Co., barred dozens of China’s largest tech companies from buying American parts, and even slapped bans on ByteDance Ltd.’s TikTok and Tencent Holdings (OTC:TCEHY) Ltd.’s WeChat.

Read more on how China wants to build its own core technology

Initial details of the five-year plan stressed the need for sustainable growth and also pledged to develop a robust domestic market. Officials didn’t specify the pace of growth they would seek over the period, but said the National Development and Reform Commission would work on guidelines to be submitted to country’s parliament in March.

Xi’s April speech called for strengthening China’s advantages, saying its strong position in international industrial chains could act as a deterrence for external parties to cut off supply. He also called for China to consolidate its role as a global leader in the digital economy, and actively participate in formulating international rules in digital currency and digital tax to create new competitive advantages.

Xi emphasized the role of state-owned enterprises -- a sticking point in trade negotiations with the U.S. -- calling them “an important pillar and support for national rejuvenation and for the party to govern.” He said SOEs must be “stronger, better, and bigger,” but that they also needed reform, without specifying.

The speech also touched on expanding domestic demand, improving urbanization strategies, optimizing technology resources, and prioritizing the environment and public health.

©2020 Bloomberg L.P.

© Bloomberg. A vessel loaded with shipping containers is docked at the Yangshan Deepwater Port in this aerial photograph taken in Shanghai, China, on Sunday, July 12, 2020. U.S. President Donald Trump said Friday a phase two trade deal with China isn't under consideration, saying the relationship between Washington and Beijing has deteriorated too much. Photographer: Qilai Shen/Bloomberg

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.