Experts say global logistics links keep diversifying, evolving to back online economy

BEIJING — A Chinese steel mill moved the model of its smart workshop into the digital tech-themed exhibition hall of the first global supply chain expo late last week.

Instead of a smokestack plant, Nanjing Iron & Steel Co is making its manufacturing more digital and supplying more sophisticated and tailored components to its global customers.

Featuring "just in time and customer-to-maker", the new workshop, which started operations in 2020 with the support of robotics and digital virtual technology, can run with merely five workers per shift, said Xu Xiaochun, NISCO's executive president, at a seminar during the China International Supply Chain Expo, the first of its kind in the world devoted to promoting industrial and supply chain collaboration.

The expo was held in Beijing from Nov 28 to Dec 2.

NISCO, one of the exhibitors from traditional industries, defined itself as an innovation-driven enterprise, and set up shop in the expo's digital tech area.

A mixed reality helmet on display that can provide real-time digital assistance to workers has already been applied to its workshop.

"Our management has changed from an experience-driven one to a data-driven one. Through the intelligent algorithms and the industrial internet, the development cycle can be shortened and the collaborative efficiency of the industrial chain can be improved," said Xu.

NISCO's quality steel has been used in Saudi Aramco oil pipelines, Qatar's World Cup stadium, and Siemens' offshore wind power turbine, to name just a few.

Also at the expo was GZTech, a startup founded in 2018 that specializes in digitally controlled pulsed laser devices. The products it brought to the CISCE are mainly used in hard and brittle material processing, surface marking and cleaning.

"China used to import laser devices, now we have started to explore global markets with more affordable products," said Peng Yong, GZTech's global trade manager. "They are 50 percent cheaper and have equal quality."

Within a year, GZTech's sales increased from next to nothing to 20 million yuan ($2.8 million) in overseas markets in 2023, finding customers in the United States, Mexico, Turkiye, India and Germany.

"It's a small bite in this sector," said Peng. "But a diversified group of suppliers is definitely favorable for a secure global supply chain."

Role of e-commerce

As more small and medium-sized Chinese manufacturers started to tap the global market, e-commerce platforms have played their part. Nanjing-based Weichi group is one of them.

Weichi, an online intermediary that helps increase the exposure of mechanical and electrical accessories made by local exporters via overseas social media and search engines, has seen rapid growth during the past few years.

"We serve more than 2,000 Chinese foreign trade enterprises every year and most of their clients come from the US and Europe," said Yang Qingyao, marketing manager of Weichi, at its booth.

Overseas buyers in mechanical and electrical supply chains pay more attention to quality and affordability than brand awareness, and the online platform facilitates those global transactions, Yang added.

Newegg, a Los Angeles, US-based online retailer of computer hardware and consumer electronics, came to the expo because it is optimistic about China's local IT gadgets that upgrade from low-priced products to prestigious brands.

"The made-in-China product price per order at Newegg achieved $300, which is the highest in North America for an IT product platform," said Chen Gang, executive vice-president of Newegg China.

Other companies, including Amazon Global Logistics, Walmart, Google, Visa and Mastercard, set up booths at the digital tech zone of CISCE to look for business opportunities in the Chinese supply chain.

Interconnected network

Rebeca Grynspan, secretary-general of the United Nations Conference on Trade and Development, said at the CISCE's opening ceremony that the real story of globalization is written through supply chains, an interconnected network that connects continents, especially in a digital age.

In 2022, China's digitally delivered service trade value rose 3.4 percent year-on-year to $372.71 billion, a historic high, according to the Ministry of Commerce. By the end of 2022, the number of Chinese digital service platform enterprises with an individual market value of over $1 billion had exceeded 200.

"Now the global supply chain is constantly evolving and diversifying to support our digital economy," said Wang Binying, deputy director-general of the World Intellectual Property Organization, at the expo.

An initiative put forward at the CISCE called for more support for enterprises to strengthen cooperation in building digital infrastructure such as information communications, cloud computing, data centers, and smart cities.

Events like CISCE are important and unique in their ability to bring together people up and down the supply chain, said Pamela Coke-Hamilton, executive director of the International Trade Center.

The CISCE came after a succession of meetings and trade shows China hosted this year, including the Belt and Road Forum for International Cooperation in Beijing, the China International Import Expo in Shanghai and the Global Digital Trade Expo in Hangzhou, Zhejiang province, in an effort to secure and expand the global supply chain and inject new impetus into world economic growth.

At the recently concluded second Global Digital Trade Expo in Hangzhou, deals on 32 projects with a total value of over 155.8 billion yuan were reached by leading enterprises in the sector, including those from Germany, France, Japan, Hungary and Singapore.

"Digital connectivity is set to be one of the biggest difference makers when it comes to the future of trade," said Coke-Hamilton. "And China has a lot of experience in this area and can share best practices and lessons learned with small businesses of other developing countries."