Discover and read the best of Twitter Threads about #gvc
Most recents (6)
Joining high-standard economic / trade pacts such as #CPTPP will be an important strategic move for #China to accommodate itself amid the current changes, says Huang Qifan: mp.weixin.qq.com/s/lBj7m4Usv_M-… 1/6
Joining CPTPP will level up China’s opening-up drive, which will force more in-depth and fundamental reforms. That will reinvigorate Chinese market participants, improve the efficiency of the internal circulation, and step up forming a mature market economy...2/6
Meanwhile, participation in the pact will help China to open up wider and engage more in the international circulation...3/6
Since its accession to the WTO, #China has integrated deeply into the #GVC and become a global manufacturing center. But amid the pandemic, countries including the #US and Japan have stepped up onshoring of supply chains...1/6
Under the new situation, maintaining the safety and stability of supply chains has become key to accomplishing the "six priorities" for China...2/6
Despite rumors that foreign companies are withdrawing from China, Chinese market remains attractive to multinational companies and the pressure of supply chain relocation will be relatively small in the short term...3/6
#China should think about how the #GVC will be reshaped, tap into its institutional advantages, reinforce #infrastructures that underpin industrial clustering, forge a fresh industrial ecosystem based on new technologies, and digitalize its traditional sectors...1/7
To this end, Huang Qifan proposed to:
1. Optimize China's supply chain by improving the weak links. Some of these weak links could be fatal, because once they get disabled by uncontrollable political factors or natural disasters, the entire supply chain would break down...2/7
1. Optimize China's supply chain by improving the weak links. Some of these weak links could be fatal, because once they get disabled by uncontrollable political factors or natural disasters, the entire supply chain would break down...2/7
That's why China must force itself, amid the global supply chain restructuring under the pandemic's blow, to realize the local production of key parts, step up R&D efforts to make technological breakthroughs, and ultimately replace the imported parts with self-made ones...3/7
Market is the most effective means of resource allocation. "Decoupling" and "manufacturing relocation" go against market rules.
The reshuffle of the global supply chain will not lead to decoupling from China, but under market forces, it will become more vertically integrated, more diversified and resilient.
The #covid19 pandemic has driven the restructuring, not only the relocation of the global supply chains. Relocation will inevitably incur new investment costs, but no one has the intent to invest in a recession-clouded world.
#COVID19 has placed strains on the global value chain (#GVC). Many say a lot of manufacturers will move out of #China. Some are optimistic and do not worry about it much, since businesses are not likely to move out easily given the high costs, such as Huang Qifan, CF40 Advisor.
He says amid #GVC restructuring, countries will not easily decouple with #China as some Western politicians hope; instead, the transformation will be market-driven, with more vertical integration, and the GVC will be more diversified and resilient: mp.weixin.qq.com/s/fqBdcqQUZhyy…
However, Yu Yongding, CF40 Advisor, holds a more cautious view. He believes most people in the US economic community don't want to decouple (which is a good thing for China). But the problem is, will American politicians succumb to the business community’s demands for profits?
6 ways that the #US may try to escalate the #tradewar by Yu Yongding at CASS:
1.More #tariffs. However, there may be an indigenous, natural force in the US to rectify #Trump’s wrong practice of “extreme pressure”.
1.More #tariffs. However, there may be an indigenous, natural force in the US to rectify #Trump’s wrong practice of “extreme pressure”.
2.Escalate #investment war. But as long as #China does its own things well, it can retain and attract foreign investments.
3.Cut off the #GVC and strangle China's tech companies.
3.Cut off the #GVC and strangle China's tech companies.
4.1. Escalate #exchangerate war. Maintaining exchange rate stability under the pressure of #RMB depreciation will inevitably exert upward pressure on #interestrates.
