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The United States has issued an administrative order to adjust the supply chain of important parts, and will build a stable procurement system in four key categories, including semiconductors, pure electric vehicle (EV) batteries, rare earths and medical products, and cooperate with allies or regions to advance the supply chain. Strengthening measures. Although they did not directly point to China like Trump, everyone understands Washington’s intention to try to use ideology and values ​​as a call to reconstruct the past purely market-driven global supply chain in order to get rid of the supply chain to mainland China. Dependence. It needs to be said that this is an impossible task.

The global high-tech industry is a golden abstract concept, but the supply chain is a real physical existence. Although top-down political forces will intervene from time to time, on the whole, its internal logic is based on market factors such as product quality, cost efficiency, and cost-effectiveness, and is driven from the bottom up. Ultimately, based on the advantages and capabilities of countries, a global division of labor and collaboration network with complementary advantages will be formed. With its own efforts, China has become one of the important centers, and is constantly climbing from the low-end to mid-to-high end of the industrial chain through innovation-driven, transformation and upgrading.

However, many Americans believe that it is unacceptable for China to surpass the United States. They believe that it can be contained by various means. Today's Biden administration is hoping to reach the goal of containing China by uniting more allies and making some contributions in the field of supply chain. The first is to create an alternative supply chain. With the existing technological advantages and global strength of the United States, there is no problem with technical feasibility. Rebuilding the supply chain is nothing more than three purposes: one is to prevent major disasters or geopolitical conflicts and exchanges. It is a "spare tire" and does not need to pay attention to cost-effectiveness; the other is to use the "visible hand" of the government to reconstruct supply. It is obviously unrealistic to regain its advantages in open market competition. The third is to prepare for the “weaponization” of the supply chain in the future, and use the supply chain as a “nuclear option” to curb China’s rise.

The deterrence effect of fighting alone during the Trump era was not significant. Can the Biden administration turn the situation around by forming gangs and "groups"? In addition, the effect of a single core technology is not ideal, so is the supply chain a more effective and powerful "nuclear option"?

According to this logic, the global supply chain may face three stages. The first is the globalization stage of the supply chain. The prosperity of the high-tech industry in the past few decades has relied on the globalization of market-driven supply chains, for which China has contributed. Now, it is entering the second stage, which is the politicization of the supply chain, and the political power of the United States has become the biggest variable. In the future, we must be alert to the third stage, which is the "weaponization" stage of the supply chain.

The supply chain system has long been me in you, and you in me. Because of its powerful externalities, it has the attributes of quasi-public goods. With the strong intervention of geopolitics led by the United States, the supply chain has been injected with great uncertainty, which is the biggest enemy of the supply chain. During the epidemic, the global supply chain was greatly impacted, and the global medical and personal protective equipment was severely in short supply. This is a natural disaster. The recent "core shortage" phenomenon in the automotive industry is largely due to "man-made accidents", which is inseparable from the US government's "politicization" and "weaponization" of semiconductors. The shortage of semiconductor supplies has forced US auto companies and other manufacturers to cut production. Only a highly certain market-oriented global supply chain system can truly serve the interests of the United States.

In the past two years, the U.S. government has continuously escalated Huawei’s cessation of supply, showing that in order to contain China, they will do whatever it takes, and we must take precautions. However, we do not need to be led by the US government's every move. We still have to base ourselves on ourselves, pursue an active defense policy, and formulate relevant strategies.

First, China will not use its own supply chain to attack others. The rise of China depends on market factors such as labor costs, product competitiveness and technological innovation. Therefore, it is a long-term solution to increase innovation, speed up development, and strengthen one's own strength. Especially innovation. The gap in innovation directly determines the effect of the US government's substitution strategy. We still have a big gap in the fields of semiconductor equipment, materials, and manufacturing. The best way to deal with it is to make ourselves bigger and stronger, to continuously improve our strength, and to avoid opening the gap in technological innovation.

Secondly, the defensive heart is indispensable. We also have to carry out a comprehensive survey of the supply chain, timely check for omissions and fill vacancies, and address various risks in the supply chain to make up for shortcomings and eliminate hidden dangers.

Third, establish the necessary countermeasure system. If anyone offends me, I will offend others. In 2020, China has established a “list of unreliable entities” system. The Ministry of Foreign Affairs has decided to impose sanctions on US companies involved in arms sales to Taiwan, as well as relevant US individuals and entities that play a bad role in arms sales to Taiwan. As a Japanese media said: "Now China has begun to build a toolbox similar to US sanctions, which can use the economy as a means of attack and prevent unreasonable slanders or restrictions on its corporate or national policies by external forces."

In response to supply chain issues, we should expedite the study of corresponding countermeasures. During the Trump era, some American companies were involved in sanctions against Huawei, and there was a certain passive "component". China has so far not imposed substantive sanctions on those companies. However, this situation is not laissez-faire and indulgent. In assisting the new US government to rebuild the alternative supply chain, it will more embody the "proactive" side of enterprises. If the supply chain is really "weaponized" then the nature will be completely different, and China will never let it go.

The global supply chain, as a quasi-public goods, relies on everyone's joint construction and maintenance. It is necessary to guard against the black sheep causing the whole body's broken window effect. At present, supply chain globalization has a considerable degree of high efficiency, and certainty is its lifeline. The current "chip shortage" is largely due to the uncertainty caused by the epidemic and the Sino-US technology war. Customers accumulate inventory and aggravate the imbalance in the supply chain. This domino effect is still in its early stages, and the next evolution is hard to be optimistic. Today, Washington’s actions further exacerbate this uncertainty: supply may be cut off at any time, and the supply chain becomes even more unpredictable. It can be said that the political intervention of the US government is the most serious virus implanted in the supply chain. Whether it is a chronic attack or an acute outbreak has become the biggest suspense. The only certainty is that in the end, no one will benefit from it.