US and China pitch rival supply-chain visions in latest clash over global trade and economic needs

The US and China this week are pitching rival visions of what constitutes a resilient and sustainable supply chain, marking the latest chapter in their fierce competition to assert a global trading system built around their respective economic needs.

Just hours before Beijing was to launch its first international expo on supply chains featuring American tech giants like Tesla, Apple, Intel and Qualcomm under the tagline “connecting the world for a shared future”, US President Joe Biden convened the inaugural meeting of his supply-chain resilience council in Washington on Monday.

In doing so, Biden announced 30 new actions “to strengthen supply chains critical to America’s economic and national security”, according to the White House.

The measures are meant to spur domestic production of essential medicines and cut reliance on “high-risk foreign supplies” of medical products, calling to mind widely held American concerns at the height of the coronavirus pandemic.

US Transportation Secretary Pete Buttigieg talks about supply chains while introducing President Joe Biden at the White House on Monday. Photo: Getty Images via AFP

They entail new investments in tools to monitor supply chains by sharing data more efficiently among federal agencies and assessing risks to the supply of renewable energy resources.

The framework seeks to establish rules covering areas ranging from data protection to carbon emissions, and its founding members comprise 14 Asia-Pacific nations who together account for 40 per cent of the world’s GDP.

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Washington also established an early-warning system for supply-chain disruptions in semiconductors, a cornerstone technology for both economies and a point of contention with Beijing.

Biden and his fellow Democrats are eager to score political points with a visible implementation of his repeated pledge to fortify US supply chains and rely less on China. At various points in his presidency he has called for relocating more American manufacturing stateside.

As the race intensifies, Biden could seek to cut prices for American consumers. Since entering the White House in 2021, he has kept in place Trump-imposed tariffs on Chinese imports worth more than US$200 billion. But several studies suggest American companies and consumers have ended up absorbing those costs.

And although the volume of US goods imported from China has fallen sharply, American supply chains remain indirectly tethered to the Asian giant through third-party countries like Mexico, a leading exporter of goods to the US that has recently deepened economic ties with China.

On Monday, Biden said the US “never gives up” and predicted that 50 years from now historians would view “this moment” as “the beginning when America won the competition of the 21st century”.

Meanwhile, Beijing’s supply-chains expo will host 515 companies from 55 countries and regions between November 28 and December 2.

American participants account for 25 per cent of the registered overseas exhibitors at the event, according to the China Council for the Promotion of International Trade, a Beijing-backed trade association.

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The council has marketed the Beijing expo as a “testimony to China’s sincerity and readiness to greater opening up and its responsibility as a major country”, adding that economic globalisation was facing “counter-currents”.

The messaging follows a warning uttered by Xi in October about “unilateral sanctions, economic coercion, decoupling and supply-chain disruption” at a seminar marking 10 years of China’s multibillion-dollar Belt and Road Initiative.

To stem inroads in the Beijing-centred trade network and in general, Washington since last year has imposed restrictions on China’s ability to export advanced technology.

Xi at Apec reportedly reiterated to Biden his stance against economic decoupling. Following their meeting, Biden told American business leaders that he was “de-risking, not decoupling” from China.

South China Morning Post