China
COVID-19 doesn’t spell the end of supply chains
Author: Ken Heydon, LSE
Well before the COVID-19 pandemic, global value chains (GVCs) were losing their impetus as drivers of world growth. Between 2012 and 2015, GVCs were already playing a lesser role in stimulating trade than they had in earlier cycles. Concerns about the environmental footprint of globally-fragmented production were one thing. But rising protectionism was the principal reason.
This became more apparent with the onset of US punitive trade action against China under the Trump administration. Among many examples, penalty tariffs against China led Japanese firms Toshiba and Komatsu to shift the assembly part of their supply chain (at considerable cost) from China to Thailand, Mexico and, in a form of onshoring, to Japan itself.
COVID-19 has transformed and accelerated these trends, triggered by factory closures, transport restrictions and mounting national security concerns. The impact in some cases may be temporary, like the export restrictions impeding and distorting the supply chain for surgical facemasks. But elsewhere the effects will be far-reaching and persistent.
Over 200 of Fortune global 500 firms have a presence in Wuhan. Disruption to China-centred supply chains has seen plant closures affecting firms as diverse as Apple, Hyundai and Airbus. The UN Conference on Trade and Development (UNCTAD) expects global foreign direct investment — a key facilitator of globally fragmented production — to fall by 30–40 per cent in 2020–21.
To be clear, this does not spell the end of globalisation nor global supply chains. David Ricardo’s foundational insight that a country will export the product in which — on the basis of domestic opportunity cost — it has a comparative advantage and import the product in which it has a comparative disadvantage has proved remarkably robust.
One important application of this principle is the vertical specialisation of the GVCs, or specifically the location of skill-intensive production in high-wage countries and the movement of labour-intensive stages to low-wage countries. This enables goods to be produced where cost is lowest.
As former UK Treasury minister Jim O’Neill said recently, as long as firms seek to satisfy customers with the highest quality products at the lowest possible prices, globalisation will remain a fact of economic life.
A global shock also does not mean that supply chains in all sectors are being affected identically. OECD research on recovery rates after the 2008–09 global financial crisis suggests that supply chains in mining and quarrying are much less prone to external shocks than are those in, for instance, motor vehicle production. This is because they have a relatively higher services component, typically less prone to cyclical movements than manufacturing, and are composed of a less diverse bundle of technologically complex products.
Although in the aftermath of COVID-19, the global fragmentation of production will continue and some supply chains will be relatively less disrupted, it won’t be business as usual — and certainly not in the Asia Pacific region.
Over time — and probably only at the margin — there will be attempts to reduce dependence on GVCs through onshoring based on 3D printing and accelerated automation of labour-intensive activities. More immediately, the GVC itself will be radically reconfigured with the introduction of digital supply networks based on functional silos linked via the use of big data analytics to better anticipate and deal with disruption.
This could enhance efficiency, but other likely changes may not. There will be moves to shorten and regionalise supply chains, strengthening links to the distorting preferences of regional trade agreements. COVID-19-driven ‘sovereignty’ policies compelling firms to relocate their data within national borders — as already happens in China and India — could reduce future gains from digitalisation. And accelerated moves, backed by government funding, to reduce dependence on China will come at a cost.
The desire of countries to reduce supply chain dependence on China will be profoundly affected by changes taking place within China itself. Part of the dynamic of China’s rise is the goal of capturing more value-added within the supply chain. This was seen when Chinese smartphone manufacturers shifted production towards more sophisticated components, with Xiaomi launching its first processor and Huawei its own chip and memory. Still, Chinese firms developing in-house competencies will also seek benefit from global fragmentation by…
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Is journalist Vicky Xu preparing to return to China?
Chinese social media influencers have recently claimed that prominent Chinese-born Australian journalist Vicky Xu had posted a message saying she planned to return to China.
There is no evidence for this. The source did not provide evidence to support the claim, and Xu herself later confirmed to AFCL that she has no such plans.
Currently working as an analyst at the Australian Strategic Policy Institute, or ASPI, Xu has previously written for both the Australian Broadcasting Corporation, or ABC, and The New York Times.
A Chinese language netizen on X initially claimed on March 31 that the changing geopolitical relations between Sydney and Beijing had caused Xu to become an expendable asset and that she had posted a message expressing a strong desire to return to China. An illegible, blurred photo of the supposed message accompanied the post.
This claim was retweeted by a widely followed influencer on the popular Chinese social media site Weibo one day later, who additionally commented that Xu was a “traitor” who had been abandoned by Australian media.
Following the publication of an ASPI article in 2021 which exposed forced labor conditions in Xinjiang co-authored by Xu, the journalist was labeled “morally bankrupt” and “anti-China” by the Chinese state owned media outlet Global Times and subjected to an influx of threatening messages and digital abuse, eventually forcing her to temporarily close several of her social media accounts.
AFCL found that neither Xu’s active X nor LinkedIn account has any mention of her supposed return to China, and received the following response from Xu herself about the rumor:
“I can confirm that I don’t have plans to go back to China. I think if I do go back I’ll most definitely be detained or imprisoned – so the only career I’ll be having is probably going to be prison labor or something like that, which wouldn’t be ideal.”
Neither a keyword search nor reverse image search on the photo attached to the original X post turned up any text from Xu supporting the netizens’ claims.
Translated by Shen Ke. Edited by Shen Ke and Malcolm Foster.
Asia Fact Check Lab (AFCL) was established to counter disinformation in today’s complex media environment. We publish fact-checks, media-watches and in-depth reports that aim to sharpen and deepen our readers’ understanding of current affairs and public issues. If you like our content, you can also follow us on Facebook, Instagram and X.
Read the rest of this article here >>> Is journalist Vicky Xu preparing to return to China?
China
Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
Foreign residents in China can request a criminal record check from their local security bureau. This certificate may be required for visa applications or job opportunities. Requirements and procedures vary by city. In Shanghai, foreigners must have lived there for 180 days with a valid visa to obtain the certificate.
Foreign residents living in China can request a criminal record check from the local security bureau in the city in which they have lived for at least 180 days. Certificates of no criminal record may be required for people leaving China, or those who are starting a new position in China and applying for a new visa or residence permit. Taking Shanghai as an example, we outline the requirements for obtaining a China criminal record check.
Securing a Certificate of No Criminal Record, often referred to as a criminal record or criminal background check, is a crucial step for various employment opportunities, as well as visa applications and residency permits in China. Nevertheless, navigating the process can be a daunting task due to bureaucratic procedures and language barriers.
In this article, we use Shanghai as an example to explore the essential information and steps required to successfully obtain a no-criminal record check. Requirements and procedures may differ in other cities and counties in China.
Note that foreigners who are not currently living in China and need a criminal record check to apply for a Chinese visa must obtain the certificate from their country of residence or nationality, and have it notarized by a Chinese embassy or consulate in that country.
Foreigners who have a valid residence permit and have lived in Shanghai for at least 180 days can request a criminal record check in the city. This means that the applicant will also need to currently have a work, study, or other form of visa or stay permit that allows them to live in China long-term.
If a foreigner has lived in another part of China and is planning to or has recently moved to Shanghai, they will need to request a criminal record check in the place where they previously spent at least 180 days.
There are two steps to obtaining a criminal record certificate in Shanghai: requesting the criminal record check from the Public Security Bureau (PSB) and getting the resulting Certificate of No Criminal Record notarized by an authorized notary agency.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
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