Shipping containers. Dale Staton.
Yesterday, Beijing put into effect an export control law allowing it to block shipments heading abroad for national security reasons.
Beijing has yet to provide details on what products and companies will fall within the new restrictions. But the move — a counterattack on US sanctions — threatens to disrupt supply chains for foreign businesses reliant on Chinese manufacturing. Businesses are concerned that the new rules will be used as a tool in the ongoing trade war.
For sectors including apparel and footwear, the new law will likely accelerate the current offshoring of Chinese manufacturing to Southeast Asian markets like Vietnam and Cambodia, where labour costs are much cheaper. How exactly this plays out for brands outside China will depend on how Joe Biden manages US-China trade relations and whether he follows in the footsteps of predecessor Donald Trump.