On May 4, Chinese-language media Da Ji Yuan cited Taiwanese economic commentator Wu Jialong saying that the world will undergo significant changes. Specifically, because of the Chinese regime’s behaviors, the world will restructure the global supply chain and open up a new pattern.
The former chief economist of AIA company said that there are usually two supply chain risks.
The first one is a geographic risk, which means that exports are too concentrated from a particular place.
For example, protective equipment during the epidemic, such as masks, protective clothing, medicines, and antibiotics, is primarily made in China. After China is affected by the epidemic, there will be problems in transportation and logistics, and there will be problems in the manufacturing itself, which will affect the supply of these items.
The second is the security risk of strategic resources. For example, if China does not export some materials related to semiconductor security and network security, it will have some strategic impact on other countries.
Therefore, Wu suggests that it is necessary to disperse the sources of imports and not concentrate them in one place, lest problems in that place lead to issues in the entire supply chain.
Wu Jialong also said that although China is a big manufacturing country, there are various problems because the Chinese authorities use administrative intervention and power operation to intervene in the market.
For example, approvals, regulations, barriers to market entry, and a whole lot of political interference are what the Chinese regime has been doing. Furthermore, there are state subsidies in China, the theft of intellectual property, technology-for-market-that is forced technology transfer, and a lot of unfair trade practices.
At the same time, the bottom of society is still suffering, and only the rich and powerful are fed. So after the leaders of these autocratic countries have harvested a lot of wealth, they naturally tend to expand outward and have wild, aggressive impulses. That’s how it came to be that the Chinese regime wants to attack Taiwan and why Russia attacked Ukraine.
Therefore, helping these autocratic powers to develop their economies has not resulted in their transition to democracy but has instead strengthened their authoritarian systems.
Wu Jialong said that when the world’s supply chain does not include China, other countries, such as India, Vietnam, Indonesia, and Thailand, will join this supply chain.