Business turns back on China

A MAJORITY of businesses across the Asia Pacific are actively reducing their reliance on China in their supply chains, a new study has found.

The latest Asia Pacific CEO survey, conducted by Westpac’s institutional arm, found a number of large corporations in the region had or were planning to bring manufacturing back to domestic operations to minimise risks within supply chains.

Surveying 113 chief executives, the report found twothirds of firms had experienced significant supply disruptions during the coronavirus pandemic, and more than half had decided to manufacture onshore.

“Over half ( 57 per cent) of firms in the survey have begun to onshore supply and/ or manufacturing, in order to secure their supply, and more ( 63 per cent) expect to continue in this direction in the future,” Westpac’s survey said.

This shift coincides with fracturing trade relations between Australia and China, which has hit major agriculture and resources exporters.

The relationship soured further on Friday when Chinese authorities slapped Australian wine makers with import tariffs of up to 200 per cent. The Chinese government claims Australian winemakers have been illegally dumping wine into the Chinese market, which has lowered the price.

The fallout has already had a material impact on Australia’s largest wine producer, Treasury Wine Estates, which on Friday saw its share price tumble 11.25 per cent to $ 9.25.

Westpac executive Anthony Miller said the new approach presented an opportunity to “reinvigorate” local manufacturing.