China companies pour resources into research as global economy cracks
- As trade war widens into a technology conflict, supply chains are breaking up
- But a full decoupling is still a long way off, according to experts
As the US-China trade war transforms into a technology conflict, Chinese firms are increasingly seeking to develop new products and reduce their country’s reliance on a global supply chain which appears to be splitting into smaller, regional entities.
In Shenzhen, in the southern Chinese province of Guangdong, one such company is combing through the lists of products currently subject to US tariffs in search of suitable targets for development and research.
Shenzhen SunXing Light Alloys Materials, a private company set up 27 years ago, makes an aluminium titanium alloy hardener – a vital ingredient in the production of coatings for fighter jets, high speed trains, buildings and other products.
According to the company, it currently supplies half of the additive used in the production of aluminium coating for Chinese fighter jets. And, SunXing said, its technology means China does not need to rely on imports to produce high quality aluminium alloys for these critical applications.
China needs to be prepared for a break-up.
The gathering clouds of the trade war and the increasing likelihood of a decoupling between the US and Chinese economies have given added impetus to SunXing’s race to develop new products which, it hopes, will reduce China’s dependence on external suppliers.
Anecdotal evidence indicates many Chinese companies, like SunXing, are devoting growing resources to the development of their own technologies in core and intermediate products to replace imports.