Russia’s invasion of Ukraine has exacerbated supply chain security concerns for G7 nations and China alike. While efforts among G7 nations are focused on how to relocate critical supply chains away from China and Russia, Beijing itself is doubling down on self-sufficiency goals to try and wean itself off “unreliable” and sanctions-prone trading partners in preparation for more troubled geopolitical times ahead.
But a closer look at China’s trade data reveals how China is falling short in many of its self-sufficiency aims. In this note, we focus on three vital areas: food, energy, and semiconductors. Despite fastidious state planning to shore up domestic output in these areas, China cannot escape heavy external trade dependencies to meet its most vital needs. This may be a bitter pill for China to swallow, but businesses can still find opportunity in these tumultuous trade flows.
