In a major policy address at the opening of the 32nd Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting in Gyeongju, South Korea, Xi Jinping called on Asia-Pacific nations to reinforce cooperation and stabilise industrial and supply chains in a time of heightened global uncertainty. Against a backdrop of trade tensions, regional decoupling efforts and accelerating technological change, Xi framed China as a stabilising force advocating deeper integration rather than fragmentation. His remarks reflect Beijing’s strategic push to reposition its regional role and reshape supply-chain architecture in the face of what he described as “once-in-a-century” global shifts.

The strategic rationale behind the appeal

Xi framed the timing of his appeal as driven by deeper structural risks. He observed that the international environment is increasingly turbulent and volatile, and that Asia’s development is being tested by destabilising factors. In that context, he recommended that countries should “[join] hands rather than [part] ways, and strengthen our links rather than sever them.” By linking supply-chain stability with broader goals of open development and shared prosperity, Xi signalled that China views supply-chain architecture not simply as a technical matter of logistics, but as a strategic vehicle for regional influence.

From Beijing’s perspective, the shift comes amid mounting pressure from Western economies to pivot away from China-centred value chains and reshore or diversify manufacturing. With China’s manufacturing output representing around a quarter of global net manufacturing, the spectre of widespread decoupling raises risks for China’s growth model. In this setting, Xi’s message is two-pronged: reassure regional partners that China favours integration and interconnectivity, while implicitly warning that fragmentation of supply chains would be mutually detrimental. By advocating stability, China seeks to embed itself at the core of Asia-Pacific industrial networks rather than become side-lined by diversification trends.

Connecting supply chains to geopolitical and economic shifts

The supply-chain theme in Xi’s speech was not abstract. He connected it directly to digital and green transformation of trade, investment liberalisation and multilateral economic architecture. His five-point proposal included safeguarding the multilateral trading system, building an open economic environment, stabilising industrial and supply chains, advancing digital and green trade, and promoting inclusive development. In so doing, he cast supply-chain stability as one element of a broader strategic framework in which China seeks to lead regional rule-setting, infrastructure investment and connectivity.

This comes at a time when the Asia-Pacific region is under increasing strain. Exports from Asia to Western markets are being disrupted by tariffs and trade policy shifts; China itself is facing pressure from U.S. and European efforts to reduce dependencies on Chinese supply-chain nodes. At the same time, China has moved deeper into the Asia-Pacific region via expanded outward investment, including in data centres, battery minerals and manufacturing capacity. Xi’s address, therefore, serves to link China’s economic footprint with regional supply-chain integration—essentially framing China as the platform for Asia’s production and trade future.

Implications for stakeholders and regional architecture

For other Asia-Pacific countries, Xi’s call presents both opportunities and dilemmas. On the one hand, embedding deeper into China-anchored supply chains may promise access to scale, investment and infrastructure—especially for Southeast Asian economies looking to ramp up manufacturing, green industries and digital trade. On the other hand, reliance on Chinese-centred chains may increase exposure to geopolitical risks, particularly amid growing Sino-U.S. rivalry, concerns about over-dependence and rising costs of hedging supply-chain exposure.

From a policy lens, Xi’s message suggests that China will continue to expand its platform role, including through initiatives such as the Belt and Road Initiative, cross-border digital infrastructure and green-industrial links. It also signals that China expects its regional partners to accommodate connectivity rather than favour separation—a position that could stress relationships with countries that are diversifying away from China.

Despite the vision, implementation faces significant headwinds. Many Asian economies are already pursuing supply-chain diversification: reshoring, near-shoring, and building alternative trade corridors. Supply-chain fragmentation is being driven by geopolitics rather than purely economics. China’s proposal for “extending chains” rather than “breaking chains” has to contend with U.S. policy pushes for decoupling, semiconductor export controls and shifting trade alliances. The strategic competition over supply-chain leadership and technology sovereignty thus remains intense.

Moreover, regional scepticism may grow if China’s offer of connectivity is viewed as transactional—favouring Chinese suppliers or infrastructure over local capacity building—or if investment comes with strings attached. The credibility of China as a neutral supply-chain backbone depends on delivering inclusive benefits rather than purely China-first outcomes.

Moving forward, the true test will be in the details: which projects get financed, how trade-rules and origin-rules evolve, how digital and green transitions are embedded into supply-chain design, and whether regional partners feel they have genuine agency. For example, China’s push for digital trade, smart-customs, and green supply-chain platforms signals new terrain—but whether Asia-Pacific nations buy in or simply accommodate remains to be seen.

In sum, Xi’s appeal for supply-chain stability is both strategic and symbolic. It reflects China’s desire to shape the architecture of Asia-Pacific trade and production in an era of fragmentation, to position itself as a regional anchor, and to cling to supply-chain centrality amidst global decoupling pressures. Whether the vision translates into durable, trusted networks will depend on how broadly that integration proves to serve Asia’s diverse economies—not just China.

(Adapted from Xinhua.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy