Participants at a sub-forum discuss global industrial and supply chains during the Boao Forum for Asia Annual Conference 2023 in Boao, Hainan province, on Tuesday. FENG YONGBIN/CHINA DAILY
Global trade dependence on Asia, including China, remains stable, and the country will never lose its status as the world’s most important manufacturing hub, despite certain US moves that have been disrupting global industrial and supply chains, said senior industry experts and company executives at the Boao Forum for Asia Annual Conference 2023 on Tuesday.
Their comments emerged after a report published at the forum on Tuesday said global dependence on Asian trade in goods remained stable, and the trade dependence among Asian economies, including China, remained at a relatively high level.
The highest level of dependence — 21 percent — was found among ASEAN countries. Japan and South Korea’s dependence on China was over 20 percent, and the dependence of the Association of Southeast Asian Nations and CPTPP countries on China was close to 20 percent, the report said, based on data till 2021.
The CPTPP refers to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Among the G20 economies, most saw their trade dependence on China rise between 2017 and 2021, with only the United States and France seeing a decline in their trade dependence on China, the report said.
“It is actually good for China that some labor-intensive industries would move away, as it would help the country’s industries to upgrade to a higher level,” said Yao Yang, dean of the National School of Development at Peking University.
Yao said China will not likely lose its status as the world’s largest manufacturing hub for at least 10 to 20 years. “With some labor-intensive industries shifting to some ASEAN economies and developing countries, it is geopolitically beneficial for China as a whole, as these economies are more integrated into China’s manufacturing ecosystem.”
The Boao report also said Asia has a significant advantage in producing competitive products in global value chains.
Of the top 22 intermediate products from Asian factories in terms of export value, 21 have shown a significant rise in exports, with electronic component products, such as integrated circuits, growing the fastest, at a growth rate of up to 28.8 percent in 2021, the report said.
China was still a dominant player in the trade of intermediate goods in Asia. Among the 22 most traded intermediates, China led in 20 of them, it said.
Fabrizio Ferri, head of APAC Region of Fincantieri, one of the world’s largest shipbuilding groups, said that China indeed faces some difficulties like disruptions in industrial and supply chains.
“But China would still be a major production center,” he said. “If we have to move to Southeast Asia, it is more because we want to get close to the market and our consumers there.”
Zhang Yuyan, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said in an interview with China Daily on Tuesday that a significant change over the past three years has been that Western countries like the US have begun to pursue so-called “friend shoring”, or manufacturing in, and sourcing from, countries with shared values.
“Leveraging political power to intervene in the free functioning of industrial and supply chains is a very big threat to the long-term and stable growth of the entire global economy,” Zhang said.