China’s digital supply chain enabled factories to operate semi-remotely, which hurt traditional suppliers who have not invested in digitizing their operations.

WHAT HAPPENED: In recent years, Chinese manufacturers have invested in tools like 3D product design, virtual reality and cloud computing technologies to cut costs and shorten lead times while remaining competitive.

WHY IT MATTERS

China’s innovative supply chain has positioned it to be resilient in times of crisis. In the past few years, many clothing companies have stopped manufacturing in China and moved to countries like Vietnam and Cambodia to secure lower pricing. This market shift forced China to implement new technologies to lower costs and shorten lead times, which has enabled the country to adapt its supply chain during the pandemic, allowing it to recover faster than its competitive countries.