EY reviews changing face of chains

Companies need to put in more efforts to ride technological advances and industrial transformation so as to exploit new growth points amid rapidly changing global industrial chains, said executives from global accounting firm Ernst & Young on Tuesday.

Enterprises should prioritize resource coordination, regional collaboration and innovative development paths for further growth, said Eric Chen, partner of supply chain and operations of EY China, at the China International Supply Chain Expo that opened on Tuesday in Beijing.

Companies should develop innovative technologies, enhance financial support for technological innovation and cultivate tech-savvy professionals, which will lead to the modernization of industrial and supply chains, Chen said.

"It is essential to build an innovation-oriented ecosystem fostering collaboration among enterprises, academia and research teams for the creation of innovative industry leaders with independent intellectual property and international competitiveness. Simultaneously, it is important to improve companies' ability to access direct financing from the capital markets and foster top-tier tech talent with global influence," he said.

He also underscored the need to urgently enhance the resilience and security of industrial and supply chains in the face of new dynamics like diversification, green transformation and accelerated digitization.

In recent years, the Chinese government has intensified efforts to promote the development of industrial and supply chains.

In September, the State-owned Assets Supervision and Administration Commission of the State Council and the Ministry of Industry and Information Technology co-launched an initiative to promote cooperation among companies that are part of industrial chains, including State-owned enterprises and small and medium-sized companies whose products command niche markets.

According to an EY report released on Tuesday, to date, China has formed innovative, value-added, secure and reliable industrial and supply chains in key industries.

In manufacturing, the production capacity has significantly increased in sectors like 5G, new energy vehicles, high-end medical equipment, new materials and photovoltaics. In 2022, the revenue of listed companies in China's high-end manufacturing sector reached 13.16 trillion yuan ($1.85 trillion), with income growth significantly outpacing GDP growth, indicating a period of rapid development.

The 2022 revenue of China's digital economy reached 50.2 trillion yuan, ranking second in the world. The deepening integration of digital technology with the real economy is evident, the EY report said.

Michael Bi, managing partner of EY China markets, said the accelerated pace of China's digital transformation creates more opportunities for foreign companies in the country.

"The steady integration between the digital economy and the real economy will help foreign enterprises better adapt to the local business environment. Foreign companies can also become contributors to China's development of the digital economy," Bi said.

"Additionally, China's policies to promote green transformation further provide space of development for foreign enterprises, offering new trade growth points and driving the high-quality development of industrial chains."