China ‘supply chain security, competitiveness’ under threat, central bank official warns

People’s Bank of China deputy governor Liu Guiping tells forum companies may be looking to move factories out of China

Liu also warns that increasing international uncertainty threatens the country’s economy

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Liu warned companies may look to move production out of China. Photo: AFP

Published: 5:32pm, 16 Jan 2022Updated: 8:51am, 17 Jan 2022

China’s supply chains are under growing pressure amid increasing uncertainty in the global markets, a senior official from China’s central bank has warned.

“The impact of Covid-19 has sped up the shift in the global distribution of production,” Liu Guiping, deputy governor of the People’s Bank of China, told the Global Asset Management Forum in Beijing on Saturday.

“In addition to the influence of geopolitical contests, China’s industrial sectors are facing double pressure – industries moving into Southeast Asia and back to developed countries.

“Chip shortages and supply chain stoppages threaten supply chain security and competitiveness.”

He also identified other threats to China’s economy, including the increasingly unpredictable course of the Covid-19 pandemic; rising inflation and tightening monetary policies; and growing anti-globalisation and nationalist sentiment that could have an impact on international trade.