Constrained by strict policies in China, Western drug manufacturers are starting to turn to India. Photo/REUTERS
BEIJING – China has for years been a favorite for drug manufacturing and research due to its low costs and fast drug manufacturing contract services. Large pharmaceutical companies have set up their factories in China, even though the United States-China trade war is ongoing and the impact of the Covid-19 pandemic is still being felt there.
But now many Western countries are encouraging their companies to reduce operational risks and slowly move their bases outside China.
Western countries are now becoming more wary of China’s suffocating policies and actions in controlling companies in its region. The collapse of infrastructure and ongoing trade wars with Western countries have brought many businesses to a standstill, and the pharmaceutical manufacturing sector is one of the most affected sectors.
On the other hand, China has shown its displeasure with Western pushback by using terms such as de-risking and decoupling from China as a way to disrupt the normal operation of global supply chains.
Wang Dongwei, China’s vice minister of finance, said at a conference in Egypt last September that Beijing hoped to see a world with an improved global industrial chain, which he considered “necessary for an open and inclusive global economy”, especially after the Covid-19 pandemic. .
Wang further added that “the actions of some countries” had thrown the global industrial chain into chaos. In attacks on the US and its European allies, Wang said the countries were weaponizing the concept of national security and misusing the idea of risk reduction.
“We must firmly oppose such actions,” Wang said during a panel discussion at the Asian Infrastructure Investment Bank’s annual meeting in Sharm el-Sheikh, Egypt.
Valdis Dombrovskis, Head of Trade of the European Union (EU), said in a speech at Tsinghua University that the EU had been forced to take a hard look at its economic interdependence.
“Our answer is: economic diversification and risk reduction,” Dombrovskis said, stressing that the EU has no intention of decoupling from China.