On the 10th, people are working at a textile factory in Panyu District, Guangzhou, Guangdong Province, China. [AP]
[Herald Business = Kim Bit-na] As trade tensions between the United States and China persist, China is accelerating its strategy of supply chain independence.
The Financial Times (FT) reported on the 12th that the tariff war initiated by U.S. President Donald Trump to revive domestic manufacturing has paradoxically given significant impetus to China’s manufacturing independence.
FT reviewed financial documents of over 20 companies listed on the Shanghai and Shenzhen stock exchanges since the intensification of the US-China tariff war and found that companies increasingly attempted to use Chinese products or raw materials to replace foreign components.
Companies expect that the trend of domestic production of components in the industry will also benefit them. These companies are in sectors such as semiconductors, chemicals, and medical devices. FT pointed out that President Trump’s trade war will lead to the reorganization of supply chains for Chinese companies.
In 2015, China announced its “Made in China 2025” initiative to become a leader in advanced manufacturing, pursuing industrial self-sufficiency.
This is part of the first phase of China’s “manufacturing power” mid- to long-term plan, aiming to enhance economic independence while maintaining selective global relations.
The strategy has gained momentum due to the high tariffs imposed by the U.S. and China on each other, according to FT’s analysis.
Camille Bouleneau, an analyst at Rhodium Group, who recently wrote a report on “Made in China 2025,” commented that the tariffs heightened Chinese companies’ aspiration for self-sufficiency, noting, “They (China) certainly feel the urgency. The tariff war will be perceived as a signal to accelerate as much as possible.”
Observers assess that the Chinese government views the recent US-China trade tensions as an opportunity to test its independence policies.
One source said, “Chinese officials believe that China can now survive without American or Western products and has gained the strength to counter President Trump’s trade demands.”
Chinese industrial robot manufacturer Estun Automation announced in its annual report last month, “We have quickly secured key customers previously dealing with foreign companies and are optimizing our supply chain to replace raw materials with domestic products.”
A company official said, “Strengthening localization reduces costs,” adding, “It’s not just a trade war — the entire global economy is unstable. We hope to be ready to switch suppliers.”
State-owned emergency equipment company HAZONE told investors last month, “We have actively pursued component localization for years, and in response to the recent tariff war, we will increase the domestic proportion of the few components still sourced from North America.”