Chinese Premier Warns of Global Trade Risks Amid Supply Chain Fragmentation

Chinese Premier Li Qiang has issued a stern warning about the state of global trade and investment, highlighting the risks posed by supply chain fragmentation and declining cross-border investment. Speaking at the 16th Annual Meeting of the New Champions, held in Tianjin, northern China, Li described the international economic landscape as undergoing "profound change."

Li's remarks come at a time when geopolitical shifts and rising protectionism are causing significant disruptions in global supply chains. He noted that production systems are becoming increasingly fragmented, leading to regionalized production and shifting trade patterns. These changes are creating volatility and uncertainty for businesses and economies worldwide, as companies seek to localize production or diversify suppliers, often at the cost of efficiency.

The Premier warned that fragmented supply chains increase risks, raise costs, and reduce the overall resilience of the global economy. This fragmentation is not only a result of strategic planning but also driven by fear, leading to redundant construction, rising costs, and inefficiencies. Li attributed much of the decline in cross-border investment to recent policy shifts, particularly the reciprocal tariffs introduced by the United States, which have created deep uncertainty in global markets. Investors are now more cautious, and long-term projects are being put on hold.

Despite these challenges, Premier Li expressed confidence in China’s economic outlook. He affirmed that Beijing remains committed to doing “whatever it takes” to support global economic recovery and contribute to growth. Li noted that the Global South is “rising rapidly” and becoming central players in shaping the future of global trade, finance, and investment. China, he said, is ready to work with these nations to create a more balanced, inclusive world economy.

Li’s speech was a call to action, urging world leaders to strengthen cooperation, rebuild trust, and resist the temptation of economic isolation. He emphasized the importance of cooperation and clarity as the world navigates through an era of fragmentation, climate transition, and economic rebalancing. The Premier stressed that the global economic power is shifting towards developing nations, which now represent a significant portion of the world's population and economic growth.

Li Qiang's message was clear: the world must brace for deeper transformations and work together to ensure a stable and efficient global trade environment. He highlighted that protectionist policies are on the rise, leading to a proliferation of discriminatory trade barriers. This trend is causing a shift towards regional and bilateral trade agreements, which, while offering flexibility, also pose risks to global trade efficiency. The Premier underscored the urgent need for stronger global cooperation to mitigate these challenges and create a more resilient and inclusive global economy.