Inside the global supply chain shift
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Global supply chains have seen a profound transformation in recent years. What was once a predictable path from factory to storefront now ran through geopolitical tensions and growing concerns over the so-called national security. The way businesses cooperate and the way countries collaborate or compete is shifting fast. For global companies, especially those with a footprint in China, the challenges and choices are multiplying.

At the recently concluded Davos Forum in Tianjin, participants around the world gathered to unpack these challenges and explore what comes next. In this episode, our reporter Tian Lu breaks down how global supply chains are being reshaped and what that means for the future of trade. I'm Wang Zihan.

So Tianlu, we all know that supply chains have been through a lot of changes lately. Some say they are almost unrecognizable compared to just a few years ago. So from your perspective, what's really changed and what's driving that shift? Well, I think the global supply chain today looks nothing like what we had even five or ten years ago. If you look back, supply chains used to be very linear and quite predictable.

raw materials from one part of the world, manufacturing hubs somewhere else, and then products shipped globally. But that model is breaking down. What we are seeing now is much more fragmented, but also more regionally diversified. Well, let's take the green energy sector as an example, because when I spoke with Dr. Lin Xiao at the Davos Forum, he said the supply chain for batteries or solar panels is global by nature.

So most of the critical mineral is from the global South, like the cobalt from Africa, from DRC Congo. Actually, they are contribute over 60% of the global cobalt and also like nickel is from Indonesia also contribute over half of that

global reservation and also manufacturing and also for lithium from Australia, Argentina and Chile and over 90% of the battery now is producing in East Asia

So this is a very different supply chain compared to that conventional supply chain. But companies are no longer comfortable relying on one route or one region. The pandemic, geopolitics and now conflicts like the Middle East tensions have shown how fragile those systems are. So businesses are redesigning supply chains to be more resilient, more localised in some cases, but still global in mindset.

The phrase I kept hearing at the Summer Davos Forum in Tianjin was flexible networks, meaning companies want options. They want supply chains that can pivot when disruptions happen, whether that's a natural disaster, a political conflict or trade policy shifts.

Well, these days, it feels like all those big terms, you know, the energy security, even geopolitics, they're all sort of like tangled together. How is that changing the way companies think about doing business globally? That's such a crucial point because a few years ago, companies could think about their green strategy and their geopolitical risk strategy as separate.

But now, not anymore. They are completely intertwined now. Well, let's take renewable energy as an example. Building solar panels, wind turbines and electric vehicles, all of that depends on access to critical minerals like lithium, cobalt, nickel and rare earth elements.

And Dr. Lin Xiao told me that those resources are often concentrated in geopolitically complex regions like Congo, Indonesia, and South America.

So companies cannot just focus on tech innovation. They also have to secure reliable, ethical and politically stable sources for those materials. That's why there's so much conversation around "friendshoring" at the Forum, meaning shifting parts of the supply chain to politically aligned or stable countries.

And meanwhile, governments are pushing energy security higher up the agenda, especially in Europe after the Russia-Ukraine conflict and now with tensions in the Middle East and also the US tariff hikes. So companies are redesigning strategies to meet

not only climate goals, but also energy resilience targets. And I think the companies that succeed in the next decade will be the ones that treat green transition, energy access and geopolitical risk as one connected strategy rather than separate silos.

Now with the US ramping up tariffs again and trade tensions back in the spotlight, how are global businesses, especially those working in or with China, managing the risks while still trying to grow? The recent escalation of trade tensions among major economies triggered by the US moves to hike tariffs has reshaped global supply chains. And these new tariffs definitely sent shockwaves through the business community. But

But what's interesting is the nuance. It's not an outright decoupling, but a complex recalibration.

Well, as I spoke with some international business leaders, they still see China as critical, both as a market and a supply chain hub. Many of them are voicing confidence in China's long-term role in managing global businesses and global trade.

When I spoke with the CEO of ScienceGo, Dr. Ilham Kadri, she is a global leader in advanced materials and green tech. And she said she believes China remains a key part of the future, despite global uncertainties. It's so critical. China is, you know, it's the industrial hub.

of the world today. For the chemical industry, more than 50% of the world's production is in China. We cannot ignore China in the chemical industry and many other industries. And many businesses' leaders are also doubling down on localization within China, like building R&D centers, manufacturing locally, and integrating deeper into China's domestic market to serve Chinese consumers.

And just like Dr. Kadri said, they are Chinese in China. They don't see themselves as foreigners here. We are Chinese in China. So we really embrace

you know, the tone, the fabric, the industrial fabric in the country. But obviously, we also work with Chinese customers and OEMs to bring them and support them in their investments abroad like in Europe. And just like Dr. Kadri said, it's not a black and white scenario of stay or leave. It's about spreading risk, staying agile, and understanding that geopolitics will continue to shape trade flows.

For companies that manage that complexity well, the opportunities are still huge.

Now, there's lots of talk about China right now. You know, some companies say they are de-risking, while others are going all in on localization. What kind of mood did you pick up at the forum? What was the sort of general atmosphere like there? It's really a spectrum of opinions there. Some leaders, especially from Europe and North America, spoke only about de-risking, meaning they don't want to be overly dependent on any one country.

But interestingly, at the same time, you have many companies, especially in sectors like green tech, AI and advanced manufacturing, who are deeply embedded in China and see localization at their competitive edge.

I remember at one of the subforums, one phrase I heard from a European CEO stuck with me. He said, we are not de-risking from China, we are de-risking within China, meaning they are making their China operations more resilient, more aligned with local policies, but not walking away from the market.

And let's be honest, China's role in global supply chains, especially for clean energy, electronics and digital infrastructure is massive. So most of companies are navigating this space carefully amid global uncertainty.

Well, I guess for most people, this talk of global supply chains can sound a little bit abstract. But how do these shifts actually affect everyday life? Like our jobs, the stuff we buy, and even our access to energy? That's a great question because supply chains can sound very technical, but they touch every part of our lives.

Take electric vehicles, for example. The reshuffling of supply chains means where your car batteries are made, what materials go into them, how affordable they are, all of that could change. Or let's take a look at energy prices. As countries push for energy independence or resilience, that affects how much we pay for electricity, how reliable grids are, and how fast green technologies scale.

Even job markets are shifting. New factories in Southeast Asia, battery recycling in Europe, mining operations in Africa, all of that creates new opportunities, but also challenges, especially for workers needing new skills. And China's role is huge here because China has become a central player in key industries like EVs, solar panels and batteries.

That doesn't just drive global supply chains. It also means Chinese innovation is shaping the products people use everywhere and how fast the world can transition to greener, more accessible energy. Did you know that over 70 of the world's solar panels are produced in China? And for electric vehicle batteries, it's around 80%.

80% when you look at the full value chain from raw materials to production. But it's not just about manufacturing. And just like Dr. Kadri, the CEO of the ScienceGate said, Chinese companies are investing heavily in innovation too. That means advances in battery technology, energy storage, smart grids, all of which can drive down costs and speed up the grain transition worldwide.

So for consumers, it means you might get more affordable EVs, better solar technology or longer lasting batteries, whether you live in China, Europe, the US or emerging markets like Southeast Asia and Africa.

So when we talk about reshaping supply chains, it's not just politics or business. It's about the tech in your pocket, the energy powering your home and the future jobs people depend on. And right now, a lot of that future is being built and rebuilt with China playing a central role.

Looking ahead, Qianlu, do you think we are headed towards a more fragmented world economy? Or are we just figuring out a new kind of balance? And perhaps the answer we all want to find out is where China fits in all this. Honestly speaking, I think fragmentation is real. Yes, we are seeing more fragmentation in some areas. Countries are focusing more on economic security, building local manufacturing, controlling key technologies.

That's led to tensions like the tariff hikes we are seeing from the US or conversations around de-risking supply chains. But at the same time, global trade isn't disappearing. It's evolving. And China, I would say, is very much part of that evolution.

Despite all the noise about decoupling, China remains deeply integrated in global trade, especially in critical industries like green energy, electric vehicles and advanced manufacturing. And I heard this a lot during the Davos meeting in Tianjin is that Chinese companies are not just sitting back.

They are doubling down on innovation, investing in green tech, AI and smart manufacturing. And many are also expanding operations abroad, just like Dr. Ling Xiao said. They are partnering with global players and adapting to new trade rules. So in that sense, I think China

It's not resisting change. It's helping shape what the new global trade landscape looks like. You see this with China's role in renewable energy, from producing most of the world's solar panels to investing in global battery supply chains.

So yes, there's fragmentation, but there's also this undercurrent of reconnection through technology, shared climate goals and business partnerships. And the challenge now is finding the balance, staying resilient without shutting doors, being competitive, but still collaborative.

And China, given its size, its innovation capacity and its role in emerging markets, is going to be right at the center of that process.

As the global economy navigates an increasingly complex landscape, the decisions made today about supply chain sustainability and strategy will shape how we work, live and connect for the years to come. While tensions remain high, conversations in Tianjin suggest that many are still betting on adaptation over isolation.

We will be following the ripple effects and the emerging strategies as the world redefines what globalization looks like in 2025 and beyond.

That brings us to the end of this episode of Deep Dive. If you enjoyed it, don't forget to follow us on our podcast platforms. Just search for Deep Dive. You can also leave a comment to let us know what you want to learn about China and beyond. This episode is brought to you by me, Wang Zihang, and my colleagues Jiang Jiang and Qi Ju. Special thanks to CGTN Radio reporter Tian Liu. We will see you in the next one.