BEIJING, (Reuters) – China opposes the cutting of supply chains and is willing to build closer ties with all, Premier Li Qiang said yesterday, as a growing number of countries voice concerns at the dependence of their supply chains on China.
Speaking at China’s first ever China International Supply Chain Expo (CISCE), Li said that China will continue to create an international and rule of law-based business environment.
The expo, organised by the state-run China Council for the Promotion of International Trade, is Beijing’s latest bid to increase foreign investment in China, which has dropped to historic lows.
Li’s speech comes amid calls over the past year from the United States and the European Union to “de-risk” their supply chains and reduce overdependence on China in certain sectors, as well as efforts to cut off Chinese enterprises from some advanced semiconductors.
Recent geopolitical tensions, from Russia’s war in Ukraine to concerns over a future Chinese invasion of Taiwan, have led a growing number of foreign businesses to opt against expanding their supply chains in China, instead directing investment to countries including India, Mexico and Vietnam that enjoy better ties with the United States, a strategy known as China-plus-one.
The value of announced U.S. and European greenfield investment into China dropped to less than $20 billion last year, from a peak of $120 billion in 2018, according to Rhodium Group, while investment into India shot up by some $65 billion or 400% between 2021 and 2022.
