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Ukraine war, 1 year on: are China’s supply chains headed toward upheaval, or can it stem the tide?

  • Sanctions, pandemic disruptions and technological-containment efforts are making international firms think twice about their plans for China
  • Some companies say the free trade of goods and services feels ‘under assault’, and the ‘troubling’ developments are weighing heavy on business operations

Reading Time:7 minutes
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The pandemic and the Ukraine war have exposed the vulnerabilities of being too dependent on specific supply-chain locations. Illustration: Henry Wong
Russia’s invasion of Ukraine in February 2022 has led to tens of thousands of deaths on both sides and created Europe’s largest refugee wave since World War II. In this multimedia series marking the one-year anniversary of the conflict, we look at China’s response to what Russian President Vladimir Putin called a “special military operation” and its diplomatic, military and economic impact.
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In the 12 months since Russia evoked the ire of the West by invading Ukraine, the subsequent and unprecedented sanctions against Moscow continue to send ripples through global supply chains, spanning several industries.

Meanwhile, Beijing’s choice not to condemn the aggression of its northern neighbour – while simultaneously bolstering trade and strengthening its alliance with the pariah of the West – has served as further impetus for some businesses to diversify away from China, even as they are well aware that such a move could come at a heavy price.

Compounding the situation is the fact that tensions between Beijing and Washington have been ratcheted up on multiple fronts, from relations with Taiwan to a suspected Chinese spy balloon in US airspace.

In trade, the administration of US President Joe Biden has introduced measures to strengthen the competitiveness of its industries as China strives to retain its crown as the world’s manufacturing powerhouse.

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Matthew Fass, president of Virginia-based Maritime Products International, also acknowledged that diversification away from China became more necessary during the coronavirus pandemic, which resulted in mass lockdowns and business disruptions in the country for nearly three years. But he, like many others, is struggling to discern the best way forward.

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