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Strong brands promote supply chain resilience

China Daily | Updated: 2024-01-18 07:35

An employee works on the production line of an auto parts plant in Shenyang, Liaoning province. [Photo/CHINA DAILY]

In the past few years, industry and supply chains have been reshaped as many developed countries have tried to promote nearshoring or friendshoring on the grounds of "de-risking". While in response to this, China has been vigorously enhancing its high-tech self-reliance and the security of its industry and supply chains.

Compared with the United States and Europe, China has markedly lower inflation and interest rates. Even if some enterprises in labor-intensive industries affected by high tariffs have transferred overseas, their production still relies on the supply chains in which China is a key link.

As the European and US consumer markets become more price sensitive due to the impact of inflation, China's cost advantages have been further strengthened. Its lower interest rates also add to its comparative advantages to keep production costs low.

Lower interest rates are also conducive to boosting manufacturing investment, digital transformation and R&D investment for domestic companies. This can help promote the forming of a new development pattern in which China can make the most of what it has to counter the US-led containment efforts. That entails China seizing the chance to further consolidate its competitiveness in the global industry and supply chains.

At the same time, this is a good chance for the country to support more Chinese companies to invest in strategic industries on a large scale. China has already established its global advantages in electric vehicles, lithium batteries and solar cells. China's large-scale investment and application in the semiconductor field is also expected to change that industry's global landscape.

Chinese companies can take the opportunity to go global with their own brands. China's ability to produce high-quality, technologically advanced and cheap goods stems from its supply chain advantages, which are ingrained in the long-term labor distribution in the world market system and are therefore not easily changed.

Yet only by exploring the global market with its own brands can the country continue to strengthen its position in the global industry and supply chains. And only by creating more brands with global competitiveness can a virtuous cycle be formed for the country's industrial development.


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