Indo-Pacific Security in 2030-35: Links in the Chain

Jagannath P. Panda

Issue & Policy Briefs October, 2023

In recent years, events like the COVID-19 pandemic and the Russia-Ukraine war have brought global supply chains squarely under the spotlight. The economic impact of these disruptive events exposed the vulnerabilities of today’s global value chains (GVCs) in the face of complex, uncertain, and fast-changing environments. In the Indo-Pacific particularly, the escalating geopolitical tensions threaten the stability of supply chains and, by extension, that of the global economy. As a major transit route for international trade – about 80% of the total global trade by volume passes through the region – the Indo-Pacific is of paramount strategic importance.

Most importantly, several sensitive technologies like semiconductors and critical materials like rare earth metals transit through the region, making this immensely vulnerable area vital for global value chains. As GVCs have been pushed to the top of the agenda, it has become critical for leaders – both in the government and in industries – to redesign and future-proof their supply chains to make them more resilient in the face of disruptions. This paper explores the future of critical supply chains. It seeks to understand the risk factors that GVCs face, and their vulnerabilities in the face of rising geopolitical tensions in the Indo-Pacific region, and how building mutually beneficial dependency into supply chains is critical to making them resilient to US–China strategic competition.

 

This policy paper was first published at The Hague Centre for Strategic Studies. 

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