贸易战阴影下全球供应链重新部署-上海美国商会-2019.5-40页_4mb

Summary of INSIGHT May/June 2019

Core Content

INSIGHT May/June 2019 is the publication of The American Chamber of Commerce in Shanghai, focusing on the challenges and opportunities facing multinational corporations (MNCs) in the context of U.S.-China trade tensions. The issue explores the impact of trade war-related tariffs and policy changes on global supply chains, particularly in the context of China's role as a manufacturing hub and the potential for supply chain redeployment to ASEAN countries.

Main Viewpoints

1. Impact of U.S.-China Trade Tensions on MNCs

• The U.S.-China trade war, starting in March 2018, has led to increased tariffs and non-tariff barriers, prompting MNCs to reassess their supply chain strategies.
• Industries most affected by U.S. tariffs include electronics, transportation, and plastic goods, with China being the largest supplier of these products to the U.S.
• MNCs that rely on China's manufacturing ecosystem are facing significant challenges due to rising costs and trade restrictions.

2. Challenges of Supply Chain Redeployment

• While some MNCs are considering moving supply chains out of China to countries like those in ASEAN, such moves are not without risk.
• China has a well-developed manufacturing infrastructure, skilled workforce, and logistics system that make it hard to replace.
• Relocation to ASEAN countries may lead to higher labor and production costs, slower logistics, and lower product quality due to underdeveloped infrastructure and skill shortages.

3. Strategic Considerations for Redeployment

• Selective redeployment: Low-tech and low-value manufacturing supply chains are easier to move, while high-tech and complex supply chains are more challenging.
• Implicit influences: Retaliatory actions by China could affect MNCs' ability to sell in the Chinese market.
• Favorable policies: MNCs should assess trade policies and tariff advantages in potential relocation destinations.
• Geopolitical concerns: MNCs need to evaluate the political stability and trade relationships of the new location.
• Lead time fulfillment: Logistics infrastructure is critical for meeting customer expectations of fast delivery.
• Tariff engineering: MNCs should carefully examine their Bill of Materials (BOM) to avoid full tariff costs.
• Working environment: Ethical considerations, such as labor conditions and working hours, are becoming increasingly important.
• Early preparation: The redeployment process can take years, so early planning is essential.

4. Case Study: Garment Supplier Redeployment

• A garment supplier for a top sporting goods company is considering moving its supply chain out of China due to rising costs and stricter regulations.
• PwC conducted a detailed analysis, highlighting the importance of skilled labor and local infrastructure.
• The company identified two ASEAN locations for redeployment, with a timeline to ensure a smooth transition.
• The move aims to reduce costs while maintaining acceptable service levels for North American and European markets.

Key Information

• China's role in global supply chains: China is the world's manufacturing hub, with many MNCs relying on its infrastructure and skilled labor for high-value products.
• ASEAN as an alternative: ASEAN countries are emerging as potential destinations for supply chain relocation due to lower labor costs and reduced trade risk.
• Tariff implications: MNCs must be strategic in their supply chain design to avoid full tariff costs, especially if parts of the product are sourced in China.
• Supply chain trends in China's food sector: IGD identifies four major trends influencing the food and grocery supply chain in China, including micro-fulfilment, experimentation, circularity, and leveraging connections.
• Technology in logistics: Companies like Alibaba and Cainiao are investing heavily in automation and smart logistics systems, reducing labor dependency and increasing efficiency.

Conclusion

The issue of INSIGHT May/June 2019 underscores the complexity of supply chain management in the face of trade tensions and the need for MNCs to adopt a strategic and holistic approach to any redeployment decisions. While China's competitive advantages in manufacturing remain strong, the trade war and rising costs are pushing companies to explore alternatives, particularly in ASEAN. However, these alternatives come with their own set of challenges, and careful planning and analysis are necessary to ensure successful transitions.