The US news agency, Bloomberg, reported on the 22nd that, according to sources familiar with the Japanese and Indian governments, Japan, India, and Australia are seeking to develop a “supply chain resilience initiative” to reduce dependence on China in the wake of escalation of regional trade and geopolitical tensions.
The report quoted a source in the Japanese Government as saying that the three countries are currently conducting working-level talks, but Japan hopes to raise it to a higher level at some point in the future. Another source said that India was considering the plan and would soon make a decision on whether to join. A spokesperson for the Australian Ministry of Foreign Affairs declined to confirm the content of the talks.
The Economic Times of India revealed on the 19th that the Ministers of Trade and Commerce of Japan, India and Australia will hold a formal meeting in the near future to discuss the “supply chain resiliency initiative.” According to reports, the initiative was originally proposed by Japan to be launched before November. Japan has proposed a twin objective plan to attract foreign direct investment and make the Indo-Pacific region a “powerful economic driver”; at the same time, establish complementary supply chain relationships between partner countries.
It is reported that the plan may first be based on the existing bilateral supply chain network, such as the “India-Japan Industrial Competitiveness Partnership” previously discussed and established by India and Japan. After India, Japan, and Australia have reached an understanding on the supply chain related issues, it will also be opened to ASEAN countries.
“Japan has an advantage in high-end technology, India has a certain level of technology in manufacturing and production, and Australia’s technological level is also reasonable. A supply chain alliance of these three countries would appear to be feasible at first glance. If they cooperate actively, it is likely to play a role in stabilizing regional supply chains,” Huo Jianguo, former Dean of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce and Vice Chairman of the China World Trade Organization Research Association, told a Huan Qiu Shi Bao reporter on the 23rd. “But if this plan has a strong political purpose, of isolating and checking China, then I think it’s very likely to be like ‘bamboo baskets with nothing to show for it”.
Huo Jianguo said that China need not worry too much. “On the one hand, China’s manufacturing capacity and consumption capacity cannot be replaced by these three countries. Even if these three countries have formed a supply chain alliance as they wish, the end user market may not be able to afford the consumption of products. Moreover, the supply chain system is not something that can be grafted in a contrived manner but has to be formed naturally according to the operation and development of manufacturing in each place. This approach of forcing the government to come forward and set it up against economic laws is ultimately difficult to achieve results.”