China eyes Western supply chains after Lebanon pager shock

The recent turmoil in West Asia, particularly the electronic device explosion incident in Lebanon on September 18, sparked a moral debate in many countries. However, in China, the discourse focused on whether the development could open up new opportunities for the Chinese electronics industry, particularly by giving a boost to China’s declining mobile phone exports.
According to Chinese estimates, after peaking in 2015, when China exported 1.343 billion mobile phones globally, the number of mobile phone exports has been declining ever since. By 2022, China’s mobile phone exports were around 822 million units, a decline of 39 per cent. In 2023, the number fell to less than 800 million units, a decline of more than 40 per cent. Some of China’s losses have been India’s gains under the intensifying “China+1” trend at the global level.
However, some Chinese strategists believe that the shift in West Asian geopolitics, especially the pager and walkie-talkie explosion incidents in Lebanon, could be a blessing in disguise for China’s manufacturing industry. Given the alleged links to Taiwan, Japan, and Europe, the Chinese side argues that one of the implications of these incidents could be the emergence of an unprecedented “crisis of trust” in the global consumer electronics market. They suggest that there will be a greater realisation globally that electronic products produced under the US or Western systems are not foolproof and may carry potential security risks.
For example, Mei Hualong, a professor at Peking University, argued that the attack has the potential to change the “rules of the game” and cause a chain reaction. After the 9/11 terrorist attacks, people’s understanding of terrorism changed, and the global aviation industry underwent significant adjustments. The Lebanon incident, which uses a new method of “supply chain warfare”, may have a similar effect, whose impact could unfold rather slowly, he added.
China’s opportunity to challenge Western electronics
The Chinese side noted that the explosion incident and back-to-back targeted killings triggered serious concerns among consumers in Arab countries about the security of electronic products produced in or whose supply chains are controlled by the West. On the Arab social media, many social media users reportedly advocated boycotting Western electronics and turning to alternatives like Huawei over Western brands.
The Chinese side further noted that this is not the first time that the countries in West Asia have been affected by “Israel’s communication tampering”. Syria, Jordan, Egypt, and Turkey have all been at the receiving end for a long time. The lack of independent technology, the absence of a supporting industrial chain, and the threat of a technologically superior adversary are common problems facing the entire West Asian telecommunications market.
The repeated assassinations and attacks caused by data leaks in Iran, Syria, Iraq, Lebanon, and other countries are a concern not only for countries directly involved, but also for other rich Gulf countries. The search for a safe and reliable communications and energy industry chain has become a consensus among almost all West Asian countries. And, China wants to promote itself as the “most viable alternative” in such a situation.
The Chinese side wants to seize the opportunity to further intensify their attack on the sustainability and legitimacy of Western industrial and supply chains, and to argue that it is the West, not China, that poses a greater supply-chain risk. They appear keen to promote the acceleration of a global supply chain reconstruction system, where de-Westernisation, rather than de-Sinicization, becomes the dominant trend in certain non-Western countries.
Shen Yi, a professor of International Politics at Fudan University, argued: “After the Sino-US trade war, the world now has two sets of technical systems, two sets of standards, and two sets of ecosystems. How can China compete with American standards? Yes, we may not be as advanced as them, and our technical parameters may not be as high as them, but we can guarantee that our products will not explode, it is safe. If you don’t want to be bombed, you can use mine.”
Accordingly, the Chinese side is keen on promoting ‘Made in China’ as a symbol of not only cost-effectiveness and good quality, but also of “technological autonomy, independence, safety, and reliability”. It is being advertised that all electronic components of Chinese electronics are produced and assembled domestically and have little chance of being manipulated by outside powers – an important reason why consumers in West Asia or elsewhere may like to choose Chinese-made electronic products.
Will the Chinese design work? Only time can tell. However, since India is striving to make its mark in global manufacturing through an “export-led growth for smartphones in particular, and electronics in general”, it can ill-afford to overlook the crosscurrents of supply chain geopolitics.
(Antara Ghosal Singh is Fellow, ORF, New Delhi. She is a graduate from Tsinghua University, China, and has been a Chinese language fellow at the National Central University, Taiwan)