Chinese expertise expected to boost Asian countries’ supply chains
The COVID-19 pandemic has underscored the need to enhance the robustness of global supply chains, and one way to do that is to boost the resilience of the industry chains in Asia by building on the strengths of the regional powerhouse China, an academic and industry observer said.
John Quelch, executive vice-chancellor of Duke Kunshan University, which is based in Kunshan, China’s Jiangsu province, said that Asian countries, particularly members of the Association of Southeast Asian
Nations, can “piggyback” on China to improve their supply chains.
Speaking to China Daily last week on the sidelines of the Boao Forum for Asia 2024 Annual Conference in Boao, Hainan province, Quelch said the Belt and Road Initiative has served as an important vehicle for Chinese investments overseas, aiding other nations in accelerating their economic development.
The BRI has been a “very, very important initiative on behalf of China, and I’m very confident that many recipients of BRI investments and collaborations have benefited”, said the expert, whose academic career includes a stint as a professor of business administration at Harvard Business School in the United States.
In the supply chain area, the major advantage of the Asian region is that China, as a powerhouse of Asia, is responsible for 30 percent of manufacturing output worldwide, and that core capability is something that all Asian economies can build on, Quelch said.
“That means that other Asian countries can piggyback, in a way, on the reputation that China has built, and also on the reliance of other parts of the world on Asia-based supply chains,” he said.
Among other strengths of China, the Hong Kong Special Administrative Region can serve as the leverage for Southeast Asian countries to efficiently channel export goods to the entire world, Quelch said.
Supply lines from the Hong Kong port to the rest of the world are very well established, he said. “Hong Kong has for decades been a very important logistics hub, and accordingly, I see no change in that going forward, (though) Singapore is, of course, also important.”
The Hong Kong SAR and Singapore will both flourish “once we can really further boost global supply chains, and get them back to the pre-COVID level”, Quelch said.
Better coordination
“What needs to happen is better coordination across borders within ASEAN, and the Asia region more broadly, to ensure there is a free flow of goods without impediment from tariffs and non-tariff barriers”.
In regard to geopolitics undermining Asian economic prospects, he said conflicts are always negative, and that peace is important.
That said, the region can still overcome obstacles and ride new opportunities, he said.
A tremendous opportunity in the supply chain area comes from the application of artificial intelligence and blockchain technology, which will add tremendous value and bring down costs in the global supply chain, Quelch said.
He said technological improvement and innovation are always a source of potential advancement for mankind. If new technologies are harnessed appropriately, they can help move all people toward a more prosperous and peaceful lifestyle.
“So, this is a great opportunity for all of our companies internationally to get behind global standards that will enable the blockchain technology to be applied successfully to the global supply of goods and services.”