supply chains Photo:VCG
US President Joe Biden signed an executive order on February 24 to review the global supply chains of four key products including semiconductors, in a bid to shake off dependence on overseas suppliers, especially Chinese ones.
According to US media reports, Washington is consulting its allies to establish a supply chain that excludes China, and hopes that US allies could reduce cooperation with China. Washington is reportedly unlikely to name the countries that join this plan so as to ease their worries about retaliation from China.
We would say nothing negative if the plan is solely about securing the US supply chain. But the plan may have the evil purpose of destroying and cracking down on China’s manufacturing supply chain. China should keep high vigilance on this plan and study how to take countermeasures.
It needs to be pointed out that this US plan goes against the market principle. US accusations that China imposes a coercive influence on the supply chain are groundless and inverting right and wrong. The US is at the upper stream of key technologies such as semiconductors. It has never been threatened by the so-called war on the supply chain, and it is the very brutal player that cuts China’s throat in terms of supply chain.
Many high-tech Chinese companies, such as Huawei, have been added to the US Entity List. Their normal cooperation with US companies has been cut off or severely restricted. The US has also put pressure on its allies to expand the attacks on China’s supply chain. China’s related actions are warning and countermeasures. China is not the attacker in the conflicts of the past few years, it is always on the offensive.
In terms of rare earths, the possibility of China’s suspension of supply to the US worries Washington. But everybody knows that this is just a potential counterattack card in China’s hands and China will not proactively use it against the US. The supply chain security Washington wants is an evil security that allows the US to arbitrarily attack China’s supply and an evil security that China has no ability to fight back.
This is Washington’s wishful thinking. The world has formed a common market and China is one of the largest parts. The interests of China’s manufacturing industry are closely related to all parties. The US wants to remove China from the Western economy and at the same time make the process painless or less painful. This is contrary to the basic laws of the market economy and the trend of globalization. In the past few years, the Trump administration had tried hard to crack down on China’s international trade, but China’s share of international trade worldwide has risen instead of falling. China has given its best answer.
China’s average tariff rate fell from 8 percent to around 7.5 percent. Conditions for foreign investment in China have been further improved and the country has become more open in defiance of the trade war. As a result, the Chinese market has become more attractive to the outside world. The new US administration is trying to achieve what the former Trump administration had worked so hard but failed with some deceptive words. That is to underestimate the intelligence of the world and the power of the laws of economics.
China is part of the globalization as well as the multi-centralization of global technology. It is in the interest of most of the world’s economies, including US allies.
US hegemony is not a protective umbrella for other countries. Even if it does offer protection, it must come with humiliating conditions for the protected ones. What all countries want is the security for their economic development. Expanding cooperation with China and increasing China’s orientation is more conducive to achieving such security than participating in containment and suppression of China.
As the US is the high-end country of the global supply chain, the security of its supply chain is the highest. Washington is the one that holds the key to such security. If the US takes cracking down on China’s supply chain security as the core of its own security and implement it willfully, it will surely lead to a fierce scuffle. China will not be at the mercy of attackers. Whoever attacks China should be prepared to pay the price. China has been quite self-controlled, but it is clear to all that the world’s largest trading nation is not unarmed.