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06/13/2022 Source:  South China Morning Post
Author: Kinling Lo 1 min read

US is facing supply chain challenges, but so is China, experts say

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The Port of Long Beach in California. The US-China Economic and Security Review Commission held hearings on Thursday about the challenges of developing alternative supply chains for the US to replace a dependence on China. Photo: Bloomberg
The Port of Long Beach in California. The US-China Economic and Security Review Commission held hearings on Thursday about the challenges of developing alternative supply chains for the US to replace a dependence on China. Photo: Bloomberg
  • Witnesses tell the US-China Economic and Security Review Commission that US and China remain interdependent in many sectors and hard to decouple
  • ‘It is in our own national interest to find ways to reduce China’s sense of insecurity,’ one expert argues

While the US is rightly concerned about protecting and developing its supply chain to make it less dependent on China, policymakers should remember that China has large supply chain problems of its own.
That was one message experts brought on Thursday to the US-China Economic and Security Review Commission (USCC), the government’s leading advisory panel on China policy.
Another, though, was that the US and China remain interdependent in many sectors, complicating any US initiatives to build alternative supply chains or decouple from China.

Keith Krach, a Trump administration official involved in setting up the “clean network”, has worked with Biden administration officials for further progress in diverting supply chains from China.
In an interview with the South China Morning Post, Krach said that businesses leaving Russia in the wake of its invasion of Ukraine had “created a sense of urgency” for the private sector in China, since concerns for a potential conflict between China and Taiwan appeared to heighten.

“Now with the increased probability [of a] China-Taiwan conflict, combined with the unpredictability of Xi’s recent crackdown on the private sector has on their business and financial markets, the most respected US and Europe board members are demanding from their CEOs a China contingency plan,” Krach, the former chief executive of the software firm DocuSign, said.

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