US companies were a major presence at the China International Supply Chain Expo that kicked off on June 22, the day that the government added more of their compatriots to China’s export control list.
Nvidia CEO Jensen Huang addressed the event in a video message, underscoring the US-based artificial intelligence chip company’s Chinese focus. “China is one of the world’s great centers of technology and industry,” he said. “The engineers are excellent. Developers move fast. Companies build at remarkable scale.”
Chinese exporters are banned from exporting dual-use items to companies on the export control list. The measure also bans foreign organizations and individuals from providing dual-use items originating in China to these entities.
This hot-and-cold approach to US businesses reflects China’s efforts to maintain and develop supply chains centered on itself, even as Washington calls for decoupling for economic security reasons.
The expo’s opening ceremony featured a speech by vice premier Ding Xuexiang, who emphasized the importance of international cooperation in stabilizing global supply chains. Ding is the number six official in China’s ruling party.
Such major US technology companies as Apple, Tesla, Micron Technology, and Qualcomm took part in the expo.
AI is becoming increasingly important to competitiveness for both companies and countries. The Chinese government is rapidly developing AI-related supply chains and has set up a dedicated AI exhibition area at the expo. The move also reflects the aim of attracting American companies.
More than 1,200 companies and organizations from 85 countries and regions have joined the event. Foreign companies account for 36.5% of participants, with companies from the US representing the largest share.
The expo is held under the auspices of the government-backed China Council for the Promotion of International Trade. Launched in 2023, the event aims to counter the US’s decoupling and to maintain international supply chains that include American companies.
At the US-China summit this May, the two countries agreed to build “a constructive relationship of strategic stability.” On the US side, there are hopes for greater exports to China. The US Soybean Export Council and agribusiness giant Cargill hosted exhibits at the supply chain expo. Exxon Mobil joined in anticipation of increased exports of crude oil and natural gas.
But the Chinese government also announced on June 22 that it had added ten US companies to its export control list. Chinese officials said the move came in response to the US Department of Defense having designated certain Chinese entities as “Chinese military companies.”
While signaling a position of confrontation, China is maintaining ties with US companies indispensable to its supply chains. The approach reflects the Asian country’s diplomatic and trade strategy.
Japanese companies also joined the expo amid the worsened Sino-Japanese ties that followed Japanese Prime Minister Sanae Takaichi’s remarks last November about a hypothetical Taiwan crisis. Exhibitors included Panasonic Holdings, Sumitomo Electric Industries, AGC, Daikin Industries, Nippon Express Holdings, and Mizuho Bank.
The Japan External Trade Organization also hosted an exhibit, organizing the participation of 25 Japanese companies. Sumitomo Electric chairman and CEO Masayoshi Matsumoto was among the corporate and industry officials on hand.
“When government relations are difficult, it’s traditionally been the business community that has worked to restore bilateral ties,” Matsumoto said. “Our efforts will be important moving forward.”
The Japan Chamber of Commerce and Industry also sent a delegation to China in conjunction with the expo, the first such mission since 2018.
“China’s vast market is ahead in high-tech fields,” said an executive at a Chinese subsidiary of a participating Japanese company. “US and European companies are also actively expanding there, and we hope to drive growth by enlarging our operations in China.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.