Alpaslan Keser, a Swiss Board Member of the Council of Supply Chain Management Professionals, said it most succinctly “if you understand China, you get an insight into global trade.” To understand the risk and resilience in the global supply chain we need to engage with the central role of China.
FHNW’s lecturer Dr. Dominik Wörner, member of the delegation, argued that “Supply Chain Resilience” meant that actors were considering multisourcing, nearshoring, diversification of the production network, inventory and capacity buffers, ecosystem partnerships and platform, product or plant harmonization. He further reflected on important technical issues “Artificial Intelligence, connectivity and automation will play one of the most important roles in supply chains”. Prof. Michael Jeive discussed changing attitudes towards China and how increasing geopolitical tensions were in impacting supply chain strategies and planning.
Climbing the value chain
China has shifted from cheap and low-cost processes to state-of-the-art manufacturing and has a great power in its domestic market. While China still accounts for approximately 50% of low-cost manufacturing globally, it is in value-added that its unique combination of capacity, skills, logistics, modern manufacturing, and huge internal market are almost impossible for competitors to match.
Impacts of Chinese outbound FDI
In response to the increasingly challenging geopolitical situation and changing risk profiles highlighted by covid-related supply chain disruptions, Chinese manufacturers have invested heavily in outbound FDI, primarily in Asia, to build greater resilience into their own supply chains. These investments both offer new options for international partners as well as attempting to secure greater access to key materials for the Chinese economy.
Switzerland and China
Switzerland was one of the first Western countries to recognise the People’s Republic of China in 1950. By the 1980’s, trade opportunities between the two countries opened more and more, which proved to be a win-win situation for both. Today, more than 1000 Swiss companies are active in China. However today, cooperation between the two is complicated by the increasing polarities between the PRC and the USA, a situation reflected in the publication of the China Strategy 2021-2024 by the FDFA. Felix Rosenberger from SECO highlighted the challenges for a small export-driven economy in dealing with increasingly fierce competition between two of its most important trade partners.
Learning on the ground - study tour to Hong Kong and Shenzhen
During the study-trip to Hong Kong and China, we will investigate the topic further by visiting central logistics hubs including the port, airport, and the Asia sourcing offices for Migros, learn about the latest developments in the Chinese manufacturing industry and its advanced technologies. We will see how Chinese companies are increasingly turning to automation to increase productivity and reduce costs. We will also witness China’s growing role as an innovation hub, especially in areas such as artificial intelligence, biotechnology, and renewable energy.
This will give us the opportunity to gain valuable insights and better understand how Chinese companies are expanding their supply chain practices and to consider how Swiss companies can best build resilience into their own supply chains.
It will be particularly gratifying to meet the students of Shenzhen Technology University, with whom we had an online workshop during the seminar in Switzerland.
Learning about global supply chains first hand thanks to Bertschi AG in Dürrenäsch
Thanks to Yingbo Seiler-Zhao the Project Team of Insight China and the Delegation learned some basic Chinese and etiquette. This will help to navigate through Hong Kong and mainland China. Furthermore, a big thank you to Dr. Yufan Jiang, Zhou Enlai Diplomacy Exhibition at former Chinese Embassy, Thomas Reichenbach, Lijun Yu and staff from Bertschi AG, Port of Switzerland and Twerenbold AG.
Thanks to our invaluable partners and supporters the seminar in Switzerland was a success. We were moreover spoilt with beverages and snacks from Emmi, Ricola, Valais, Orangina, Lipton, Tuca, Rivella, Landi, Red Bull and Migros.
See more of what we did during the seminar in Switzerland, enjoy watching this short video. For a more detailed content of the week, we refer you to our posts on Instagram, LinkedIn and Facebook where each day was documented in detail.
The next step of our journey is right around the corner, and we cannot wait to get more INSIGHTS about Hong Kong and mainland China. If you want to tag along our journey and our project, follow us on Instagram, LinkedIn and Facebook.
Your Insight China Team