Cheng Ze Forum: Re-Shaping Global Industrial Chains
Jul 11-2023
The 16th Cheng Ze Forum, held on June 21, centered on industrial chains and featured the keynote speeches and dialogues of two economists: Prof. Yao Yang, author of Common Sense of Economy, Dean of the NSD, and Executive Dean of the Institute of South-South Cooperation and Development (ISSCAD); Mr. Peng Wensheng, author of Industrial Chains of Grand Nation, Chief Economist of China International Capital Corporation (CICC), head of CICC research department, and President of CICC Global Institute.
Mr. Peng’s speech focused on the development and re-shaping of industrial chains under new situations. He elaborated on three major aspects: three driving forces behind the formation of global industrial chains, namely globalized markets, technological advancement, and China’s reform and opening up; three challenges confronting global industrial chains, including trade protectionism, climate change and green transition, as well as geopolitics; two specific challenges for China in this current round of industrial chain reshaping – ‘stranglehold’ risks and de-China risks.
Prof. Yao zoomed in on the resilience of China’s industrial chains. He pointed out that the Chinese economy, especially its industries, possesses a relatively high level of resilience thanks to the depth accumulated over time (having the world’s most comprehensive industrial chains) and rapid technological advancement. China is facing the challenges brought on by the restructuring of global industrial chains, yet Prof. Yao believed that such challenges have existed for some time and have more to do with the natural course of economic development than with US-engineered decoupling. In the long run, industrial chain adjustments will benefit China’s development and the one-sided decoupling of the US won’t succeed, said Prof. Yao.
In the dialogue session, the two scholars shared thoughts on the security and resilience of industrial chains, the advantages of a large-scale economy, and the impact of industrial chain re-shaping on China.
Prof. Yao believed that the current restructuring of industrial chains will push the global manufacturing sector to concentrate in East Asia and South-east Asia, with China at the core. As a result, some of China’s industrial chains will undergo vertical upgrading. China, South-east Asian countries and those learning from China’s experience will benefit from the reshaping.
Mr. Peng held the view that the industrial chains will continue to evolve and one notable development will be the profound impact of digital technology. The key for China to elevate its status in global industrial chains lies in technological innovations. He said that China has built up economy of scale in both digital technology and energy transition.
