Change in supply chains driven by sustainability, digitalisation, not trade war, say business leaders at Beijing forum
- Big multinationals are increasingly ‘regionalising’ their supply chains, say panellists at Bloomberg’s New Economy Forum
- Shift of factories away from China to avoid tariffs imposed by US is more of a ‘short-term tactical change’
Global supply chains are changing. But that has more to do with digitalisation, sustainability and the need for factories to be close to growing consumer markets than it does the US-China trade war, according to business leaders at Bloomberg’s New Economy Forum in Beijing.
Big multinationals are adopting a more “regionalised” approach to their supply chains, keeping them contained as much as possible within each geographical market and minimising the distances between suppliers, factories, vendors and consumers.
That has been a bigger driver of change than the tariffs imposed by Washington on Chinese goods, which have led many companies to shift their production facilities away from China, said the panellists at a session called “supply chains go global” on Friday.
“There are some very long-term shifts taking place and we are getting much more regional in the supply chain so you are closer to the customer,” said Noel Quinn, interim Group chief executive officer at HSBC.
“Companies do want to shorten their supply chain, they do need a response to changing business models, emergence of digital business models, [which] are making a fundamental change happen in the supply chains.