China's Production Resumption Key to Future of Globalization
Global Times
2020/2/26 21:07:25
Photo: Xinhua
Globalization is facing an unprecedented backlash as delivery delays and inventory shortages caused by the ferocious coronavirus outbreak have put the global economy, which is highly dependent on China's supply chain, at risk of heavy losses.
China is making great efforts to promote work resumption to address the temporary disruptions to the global supply chain. To a large extent, how fast China can return to work is crucial not only in terms of its own economic reboot but also to the future of globalization.
It is true that the virus outbreak has led some companies to shift their supply chains away from China, but more manufacturers in industries like vehicles, smartphones and even textiles had to halt production or are on the verge of work suspension due to inventory shortages, because no other country in the world has the capacity to replace China's role in the global industrial chain. Only work resumption in China can end the current predicament facing the global economy.
Over the past few weeks, the network connecting and supporting China's manufacturing activities has been temporarily disrupted as part of the effort to contain the virus' spread. Now it is urgent to get economic activities back to normal, meaning that obstacles to the entire production chain outside Hubei, the epicenter province of the coronavirus outbreak, should be eliminated: factories need to accelerate work resumption, while transportation, customs, ports and all other supporting industries need to resume operation.
In order to revive the almost stagnant economy, Chinese financial regulators have rolled out measures such as liquidity injections, loosened credit, tax cuts and exemptions to prevent the country's small and medium-sized enterprises (SMEs) from being overwhelmed by heavy operation burdens. While support measures may alleviate the pressure, their survival depends on the market, not subsidies, and market supply gaps won't wait forever.
According to the Ministry of Industry and Information Technology, only 30 percent of SMEs restarted operations as of Tuesday. The progress of the nationwide work resumption has been indeed slow, maybe because the fight against the virus is still on, and that's the test the Chinese economy must overcome.
Globalization has integrated the global value chain, which China has benefited from and contributed a lot to over the decades.
We should not forget that China's importance to the world economy is built on its own manufacturing strength and resilience. It is impossible for the global production chain to wait for China's restart for too long.
2020/2/26 21:07:25
Photo: Xinhua
Globalization is facing an unprecedented backlash as delivery delays and inventory shortages caused by the ferocious coronavirus outbreak have put the global economy, which is highly dependent on China's supply chain, at risk of heavy losses.
China is making great efforts to promote work resumption to address the temporary disruptions to the global supply chain. To a large extent, how fast China can return to work is crucial not only in terms of its own economic reboot but also to the future of globalization.
It is true that the virus outbreak has led some companies to shift their supply chains away from China, but more manufacturers in industries like vehicles, smartphones and even textiles had to halt production or are on the verge of work suspension due to inventory shortages, because no other country in the world has the capacity to replace China's role in the global industrial chain. Only work resumption in China can end the current predicament facing the global economy.
Over the past few weeks, the network connecting and supporting China's manufacturing activities has been temporarily disrupted as part of the effort to contain the virus' spread. Now it is urgent to get economic activities back to normal, meaning that obstacles to the entire production chain outside Hubei, the epicenter province of the coronavirus outbreak, should be eliminated: factories need to accelerate work resumption, while transportation, customs, ports and all other supporting industries need to resume operation.
In order to revive the almost stagnant economy, Chinese financial regulators have rolled out measures such as liquidity injections, loosened credit, tax cuts and exemptions to prevent the country's small and medium-sized enterprises (SMEs) from being overwhelmed by heavy operation burdens. While support measures may alleviate the pressure, their survival depends on the market, not subsidies, and market supply gaps won't wait forever.
According to the Ministry of Industry and Information Technology, only 30 percent of SMEs restarted operations as of Tuesday. The progress of the nationwide work resumption has been indeed slow, maybe because the fight against the virus is still on, and that's the test the Chinese economy must overcome.
Globalization has integrated the global value chain, which China has benefited from and contributed a lot to over the decades.
We should not forget that China's importance to the world economy is built on its own manufacturing strength and resilience. It is impossible for the global production chain to wait for China's restart for too long.
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