Commentary: China proves resilience as irreplaceable part of global supply chain

Source: Xinhua| 2020-04-03 12:01:24|Editor: huaxia

by Xinhua writer Jiang Li

BEIJING, April 3 (Xinhua) -- Some satellite images over China have been widely circulating in recent days on the Internet, showing that factories are reopening and traffic is reviving in the country.

It means that China's industrial juggernaut is ready to fully recover after weeks of slowdown due to the sudden COVID-19 outbreak.

Recently, when China was in the thick of battle against the virus, some China skeptics described the Asian country as a weak link in the global supply chain, and hinted that the world has relied too much on it.

The fact that the Asian country has managed to control the epidemic on its own turf in a relatively short time and resume production and reopen businesses in an orderly fashion has proved those skeptics wrong. On the contrary, it demonstrated the resilience of the Chinese economy.

Indeed, China has a unique spot in today's ultra complex and highly integrated global economy. Why?

The very first reason is its scale. China has the world's most populous consumer market with more than 400 million people earning middle-incomes. In the mean time, consumption has become the biggest driver of the Chinese economy for six consecutive years, contributing 76.2 percent of China's economic growth in 2018. It is thus hard for companies outside the country to ignore the abundant opportunities there.

In addition to its consuming power, China is also a nation of production. It is the only one in the world with all industrial categories of the United Nations' industry classification, and its manufacturing accounts for nearly 30 percent of the global total.

One other key factor is China's self-styled economic and social governance system, which, as demonstrated during the epidemic, can provide a firm guarantee of stability and certainty at a time of crisis.

While some are warning against putting all eggs in one basket, China is not the only one but the best one, and changing baskets is complicated and costly as it involves a host of factors including tax, labors, logistics and investment environment among others.

Take the production of Apple's electronic products for example. The current U.S. administration has been trying to encourage Apple to manufacture its products domestically, yet the plan has been so far to no avail. The reason could be as tiny as a small screw.

According to a report by The New York Times, when Apple tried to make Mac Pro, the company's top-of-the-line personal computer, in a factory in the U.S. state of Texas, it struggled to find enough screws as its manufacturing contractor could produce at most 1,000 per day. But that is not a problem in China.

During his inspection tour in China's eastern Zhejiang Province from Sunday to Wednesday, Chinese President Xi Jinping called for efforts to smooth global supply chains to ensure normal economic and trade activities. The Chinese leader's call can be taken as a timely and sensible reminder at this critical moment.

The most urgent task now facing the international community is not to look for baskets, but to make sure the eggs are not broken. That requires countries around the world to resist the false temptation of protectionism and take concerted measures to keep another full-blown recession at bay.

Fortunately, at an extraordinary G20 summit on COVID-19 last week, the world's major economies pledged in a joint statement to form a "united front" against the common threat posed by the pandemic, and committed to "realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment."

That esprit de corps is the very weapon countries around the world employed to fight off the 2008 global financial crisis. They should use it again.