At present, the aim behind the transfer of production and supply chains led by the United States and Western countries is so-called “de-risking” and “de-Sinicization,” which is causing a split in the economic landscape of the Asia-Pacific region and forcing small- and medium-sized countries to take sides. However, it is not easy for the United States to achieve its aim of excluding China from the production and supply chains it dominates. With its profound economic and trade foundation and regional influence, China remains the core of Asia-Pacific economic integration. Faced with a complex landscape, China emphasizes the concept of building a community of common destiny for humanity, remains committed to maintaining regional stability through cooperation and communication, promotes high-quality joint construction of the Belt and Road, and leads the reconstruction of regional production and supply chains.

Recently, the leaders of the United States, the Philippines, and Japan held a meeting in Washington. The three parties not only concluded a series of cooperation agreements on maritime security, but also announced a series of new economic cooperation initiatives, including assistance from the United States and Japan to help the Philippines build the Luzon Economic Corridor, strengthen infrastructure investment, and build clean energy and semiconductor supply chains. These moves by the three parties are not a matter of chance, but the latest initiative by the United States to push its alliance system to form “de-Sinicized” production and supply chains in the Indo-Pacific region. The current round of technological and industrial changes has profoundly influenced the reconstruction of the international and regional order. The United States believes that strengthening its position in the field of production and supply chains as part of its contest with China is the key to “confining” (规锁) China and maintaining its dominance in the Indo-Pacific regional order. This not only leads to the “securitization” (安全化) of economic issues in the region, but also means the “economization” (经济化) of future security issues. That is, once regional countries are tied to the U.S. supply chain, their security policies may inevitably lean towards the U.S. camp in the future.

Under the combined influence of changes unseen in a century and geopolitical competition, the balance between economics and security in the construction of the global geo-economic order is undergoing historic changes. Focusing on the Asia-Pacific region, the United States, under the banner of so-called “economic security,” has coerced its allies to promote the regional restructuring of production and supply chains with a special focus on high-tech industries such as semiconductors. This is done in an attempt to “decouple and break links” with China.

Since 2023, the United States and its allies have accelerated this process. The United States, Japan, South Korea, and other countries have continued to introduce various policies for key industries such as semiconductors, new energy vehicles, and digital trade, and implemented them in bilateral and multilateral economic cooperation with Southeast Asian and South Asian countries.

In South Asia, India seized the opportunity presented by the United States’ restructuring of its production and supply chains and tried to achieve “overtaking on the curve” (弯道超车, using a favorable situation to seize a leading position) in manufacturing. In this, they were supported by the United States. Other South Asian countries are faced with a weak manufacturing base and difficulties in industrial transformation. If this trend continues, the economic structure of South Asia may change from the current structure of complementary advantages to a structure centered on India, and South Asian countries will also become part of the global production and supply chain dominated by the United States.

In Southeast Asia, the Philippines has completely turned to the United States, while Vietnam, Malaysia, and other countries are hedging their bets and playing multiple sides. While becoming the “new darlings” of investment and technology transfer from the United States, Japan, and other countries, they have not given up cooperation with China. This creates a situation of both competition and cooperation with China. When U.S. President Biden visited Vietnam in September 2023, he stated that the U.S. recognizes Vietnam’s massive potential as a major player in the semiconductor industry, supports the rapid development of Vietnam’s semiconductor ecosystem, and is willing to strengthen cooperation to enhance Vietnam’s position in the global semiconductor supply chain. In March 2024, during his visit to the Philippines, U.S. Secretary of State Blinken visited Philippine semiconductor companies and described the Philippines as an “increasingly essential partner” in ensuring a robust and resilient semiconductor supply chain.

The aim behind the transfer of production and supply chains led by the United States and Western countries is so-called “de-risking” and “de-Sinicization,” which is causing a split in the economic landscape of the Asia-Pacific region. It is forcing small and medium-sized countries to take sides and influencing their security outlook and foreign policy choices.

However, it is not easy for the United States to achieve its aim of excluding China from the production and supply chains it dominates. China has been a participant in Asia-Pacific cooperation for decades. It has formed close economic and trade relations with countries in the region, and occupies a core position in Asia-Pacific regional integration. At present, Asia-Pacific economic integration continues to advance steadily, with trade and investment, infrastructure, and digital connectivity being particularly active areas. Regional supply chains and industrial networks are deeply intertwined. At the same time, China’s advantages in geographical location, industrial ecosystem, market size, and talent pool provide ample space for cooperation between China and other economies in the Asia-Pacific region.

At present and in the near future, the strategic adjustments of the major forces in the Asia-Pacific region will continue, especially due to the overlap and interaction of the U.S. strategic competition with China and the far-reaching impact of technological and industrial revolutions. The international and regional landscape of the past that was based on maintaining sovereignty and military strength will be more affected by economic and scientific and technological competition in the future, which will increase the complexity and uncertainty of the Asia-Pacific security situation.

Faced with the changing and turbulent situation in the Asia-Pacific region undergoing great changes, at the Central Foreign Affairs Work Conference in December 2023, China stated that building a community of common destiny for humanity is China’s solution to the questions of what kind of world to build and how to build it. Building a community of common destiny for humanity is an attempt to build a world of lasting peace, universal security, common prosperity, openness, inclusiveness, cleanliness, and beauty.

Guided by this, China must properly handle relations between major powers, especially China-U.S. relations, when handling Asia-Pacific affairs, especially in the face of the United States using production and supply chains as a new tool to contain China. Although the United States’ comprehensive strategic competition with China will not change fundamentally in the short term, both China and the United States see the importance of maintaining necessary communication to avoid misunderstandings and misjudgments. Since 2024, a series of interactions between high-level Chinese and U.S. officials has demonstrated the basic consensus between the two sides on stabilizing bilateral relations.

More importantly, China should actively work to build a community of common destiny with its neighbors, strengthen strategic coordination with small and medium-sized countries in the region, overcome the dangers of regional division and confrontation, and seize existing opportunities to promote unity and cooperation. China has always recognized the importance of the demands of small and medium-sized countries in the Asia-Pacific region to focus on economic development and adhere to regional cooperation. In the future, China should continue to use the Global Development Initiative as a starting point to continuously promote high-quality joint construction of the Belt and Road, focus on emerging industries, tap into new drivers of economic growth, lead the reconstruction of regional production and supply chains, and work with small and medium-sized countries in the region to achieve economic and social stability and sustainable development.