Global Firms Shift Supply Chains to China, Says StanChart Report

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China continues to be a preferred destination for companies worldwide aiming to reorganize their supply chains and is expected to play an even larger role over the next three to five years, according to a recent report from Standard Chartered Group.

Rising operational costs driven by economic and geopolitical challenges have prompted over half of the surveyed businesses to rethink their global supply chain strategies, including adjusting treasury management and fast-tracking digital initiatives.

The report, based on insights from 1,200 senior executives across 17 international markets, highlights China as one of the top regions for supply chain reorganization. More than half of the companies in Africa, especially those from Kenya and Nigeria, plan to strengthen trade relationships with China. Similarly, about half of the firms in India intend to increase reliance on mainland China for their trade activities.

In contrast, approximately 40% of respondents from the U.S. and the U.K. aim to keep their current trade levels with China unchanged.

Additionally, China’s domestic industries are advancing toward higher-value segments of the global supply chain, with emerging technologies like artificial intelligence, robotics, and renewable energy playing a crucial role in this evolution.

While tariffs on imports remain a point of concern, a majority—53%—of companies cite emerging technologies and global economic growth as the main strategic factors influencing the future of international trade.

“There is a rising demand among clients for reshaping the global trade and supply network. They are also accelerating the adoption of smart manufacturing and AI to boost efficiency and counteract increasing costs,” said Sunil Kaushal, co-head of corporate and investment banking at the bank.

Despite concerns that trade fragmentation could hinder short-term global growth, the development of emerging economies and technological innovations continue to offer promising opportunities for international trade, Kaushal added.