CHINA’S vast global supply chains are helping it ride out the pain from the trade war.

Consider the case of pallet jacks made by Staxx Material Handling Equipment Co. from Ningbo on the nation’s eastern coast. Chinese production dominates the lower end of the market with a big price edge over Western competitors, export director Thomas Wang said at the Canton Fair in Guangzhou.

American buyers “don’t have good suppliers to replace China,” said Wang, who added that sales to the United States account for about a fifth of the company’s production. “All the tariffs will be relayed to end users.”

In addition, the rapidly growing domestic market increasingly acts as an anchor for its global supply chain. That, and a low dependence on the U.S. market, suggests Donald Trump’s US$250 billion in tariffs on shipments can’t quickly upend it. Exports to the United States account for less than a fifth of China’s total and Deutsche Bank AG estimates that overall, China’s industrial output has only a 5-percent exposure to the U.S. market.

“Chinese production serving the rest of the world is five times more important than the supply chain serving the United States,” said Zhang Zhiwei, chief China economist at Deutsche Bank. “The key issue is whether the U.S. tariffs drive out supply chains from China that serve other countries. History suggests they will not.”

A case in recent history Zhang cited is anti-dumping duties imposed by the United States on large residential washing machines early in 2017. China’s exports to the United States plunged as a result but the impact on washing machine production overall was negligible because of shipments to other foreign markets and China’s consumers, said Zhang.

More than a dozen makers of products from furniture to mobile phones interviewed recently in China’s industrial heartland in the Pearl River Delta said they’d face short-term pain from falling U.S. orders when tariffs rise to 25 percent. They also were confident that this would be a hiccup with other foreign markets and Chinese consumers quickly taking up the slack.

Shenzhen Garlant Technology Development Co., which makes mobile phones and accessories including chargers, cables, speakers and headphones, does about a fifth of its US$150 million in annual sales with the United States, said founder Andy Yu.

Western competitors sell their products at much higher prices and competitors from Southeast Asia and Latin America lag far behind in technology and management capabilities, said Yu. China is the dominant supplier globally and it’s unrealistic to think it can be displaced, he said.(SD-Agencies)