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Experts: Trade to beat supply chain woes

By XING YI in Shanghai | China Daily | Updated: 2020-06-12 07:30
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A ship is loaded with cargoes at the Lianyungang Port in Lianyungang city, Jiangsu province, on April 14, 2020. [Photo/Xinhua]

Services and digitization to spur next round of cooperation among companies

Global trade will flourish, adapt and become more digital after the COVID-19 pandemic is brought under control across the world, despite lingering doubts over the future of globalization due to supply chain disruptions, experts said.

"The more global a company's supply chain is, the more resistant it will be to the risks from a pandemic," said Qiao Jian, senior vice-president of Lenovo Group, during a dialog in Shanghai this week.

Qiao highlighted the example of Lenovo's global sourcing and local deliveries during the warm-up dialog for the Hongqiao International Economic Forum, which will run concurrently with the China International Import Expo in Shanghai in November. The theme for the dialog this week was on stabilizing global supply chains and embracing future globalization in the aftermath of the COVID-19 epidemic.

Qiao said Lenovo had faced initial disruptions in its supply chain for mobile-phone parts as factories in China were shut in late January and February. However, the company was able to respond quickly because it could source the parts from its factories in Brazil, Mexico, the United States and Japan.

"We increased the production capacity of our overseas factories to deliver the global orders," she said, adding that more than 30 percent of its supply chains are outside China.

"When the coronavirus hit those countries, we were able to restart production at our plants in China as the epidemic had been brought better under control in the country."

Qiao said that the company has been able to meet the rising demand from overseas markets for products like laptops and tablets, as more people are now working from home.

"Our global customer base and manufacturing lines have secured us both the market demand and production," she said. "It is not sensible for multinational companies like Lenovo to go against globalization."

She said the most important thing is not to retreat from globalization, but to better integrate the global and local supply chains, solve the unequal development issues and let everyone share the profits arising from globalization.

Wang Xinkui, chairman of the Shanghai WTO Affairs Consultation Center, said the COVID-19 pandemic will not hamper economic globalization in the long term, but still poses some concerns about the security of global supply chains.

Wang said that some big companies have long considered the issue, but this time the pandemic has made the issue more conspicuous for multinational companies and nations.

"Companies cannot live without global supply chains as more than 50 percent of the international trade is between supply chains," he said.

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