CISCE: Why globalization of automotive supply chain is 'irreversible'

As the world's first supply chain expo at the national level, the first China International Supply Chain Expo (CISCE) is underway in Beijing, marking a crucial moment. 

According to the "Global Supply Chain Promotion Report" released earlier this week, more and more characteristics of "public goods" – which is defined as goods and services that are normally made available to the whole society – can be found in the global supply chain, especially with today's highly integrated production ecosystem.

In economics, a public good (also referred to as a social good or collective good) is a good that is both non-excludable and non-rivalrous. One of the characteristics of "public goods" is their "indivisibility." Economically speaking, this means that the globalization of supply chains is irreversible.

This characteristic is particularly evident in the automotive industry. According to data from the International Organization of Motor Vehicle Manufacturers, global automotive production increased to 85.02 million vehicles in 2022, of which 31.77 percent came from China, with a production volume of 27.02 million vehicles.

In 2022, electric car sales exceeded 10 million for the first time ever. That meant a total of 14 percent of all new cars sold were electric, according to the International Energy Agency.

Industry experts told CGTN that China, Europe and the United States will become the three major markets for new energy vehicles by 2030.

By then, the size of the global smart vehicle market is expected to increase 10 fold, reaching nearly $240 billion.

Behind these impressive numbers is not only China's core automotive technology strength, but also the convenience brought about by the agreements such as the Regional Comprehensive Economic Partnership (RCEP), enabling smoother trade. So, a "two-way migration" is taking place on the global highways.

Ma Wei, the co-founder and CEO of Changsha Intelligent Driving Institute, told CGTN's Zhang Haixiang, "Today, China not only provides the cost advantage, we do provide value as well."

"Because artificial intelligence is the most valuable thing we offer, its profit margin and gross margin are very high. So, we are happy to participate and looking forward to the results generated after talking to our friends."

(CGTN's Dai Antong also contributed to this article.)