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How Blockchain can help ‘Boycott China’ (‘Anywhere but China’) movement?

china blockchain

Following is a biased opinion.

Much like organic food or cruelty free produce or GMO free meats movements, we might see ‘Anywhere but China’ and ‘China Distancing’ movements in the coming months/years.  

When customers insist on buying ‘anywhere but China’, can they trust the label that says whether something is made in China or not?

We have seen companies make use of the loopholes in the law to mislead customers. Trusting a company whose primary motive is profit and governments who care more about taxes and employment than anything is rather futile.

Companies have ‘re-routed’ the supply chain to mislead folks into buying things made in one country believing them to have been made in another.

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With the world owing 5-6 Trillion dollars in debt to China, they have the muscle to bend the laws to their will in many countries, in our opinion.

In this situation, if ‘China distancing’ and ‘anywhere but China’ becomes a thing – how can customers ensure that they are not being duped?

The US was duped by China before to avoid tariffs

“A growing number of Chinese companies are adopting a crafty way to evade President Donald Trump’s tariffs: remove the “Made in China” label by shifting production to countries such as Vietnam, Serbia and Mexico,” reported Industry Week.  (To be fair, the US has used the Canada route to avoid China tariffs as well). 

This was even before the COVID pandemic and now that people are demanding that China pay one way or another, we expect the demands to boycott China made products will catch some steam. To avoid backlash from the global consumers and 

Chinese products with other country tags

china fakeAs it is evident that countries will not hesitate to cheat each other for the sake of ‘commerce’, there is no question that if the consumers demand products produced outside of China, companies with manufacturing units in China will find ways to route the products ‘via’ some other countries and dupe the consumers into believing that they are buying non-China made product.

We cannot rely on governments, companies or manufacturers to get the honest information.

That is where a trustless truth machine, Blockchain, can help.

Once you log in the source of raw materials, its journey can be tracked to see where they end up.  

Blockchain can bring the transparency (it already does)

TransaparencyIn 2019, the US Air Force chose SIMBA Chain to help with tracking the complex supply chain aspects. The Press Release states “The Air Force uses a complex supply chain to equip and repair forward-deployed forces and SIMBA Chain will play a key role in securing that chain. Long value chains are among the biggest security issue in manufacturing for Industry 4.0. This is the case for all manufacturing but is especially critical in military applications, where hostile entities would attempt to obtain or modify critical data.”

In April 2020, in the midst of COVID pandemic, Rep. Stephen Lynch introduced a bill in congress to create a National Emergency Biodefense Network that tracks the status of PPE supplies across the nation.  The interesting thing about this bill is it leans on Blockchain ‘as a single source of truth.’ According to Forbes, the “new bill…establishes a blockchain network across the entire U.S. to monitor medical supplies in the Strategic National Stockpile (SNS) and all 50 states.”

As you can see, Blockchain is already viewed as a reliable technology to act as a ‘single source of truth’.

Blockchain can help track percentage of a unit made in China

Let’s take an example of a car.  While the car may be ‘built’ in the USA, every single component that goes into ‘building’ the car may have been made in China or other countries.  How can you say how much of the car is really US made?

Blockchain can track every unit, piece, bolt that goes into the car and provide the information to the customers with a click of a button.  Traditional systems cannot provide this information to the end users without jumping the hoops.

Walmart used Blockchain to track the food supply chain and found that what would have taken them weeks or more can be traced in minutes with the supply chain on the blockchain.

Blockchain can help track the journey of a product from the mine to the hands of the customer. The infrastructure is in works and soon we might see that blockchain becomes an integral part of supply chain and transparency becomes an assumed reality.

China knows blockchain is a threat to ‘deceipt’ – so its building its own blockchain

china deceptingChina seems to be ahead of other nations about thinking through into the future.  They know that as the demand to boycott China products catches steam – companies will be forced to rely on technologies like Blockchain to provide transparency to its customers.

China may be building the world’s biggest blockchain network with BSN (Blockchain Services Network) that already includes 100 city nodes and has onboarded McDonald’s, Starbucks, Subway etc., to test their pilot Digital Yuen project.

The problem with this specific BSN blockchain is that it is centralized to the extent that data can be manipulated and users will not be privy to the changes.

This totally defeats the ‘trustless transparency’ aspect of blockchain.

It is important that customers not only demand transparency but also on the sources of information about that transparency.

Not any blockchain, it has to be a public blockchain

Given the issues with overly centralized blockchain systems (which pose the similar issues as the existing traditional systems), we will need a global public blockchain to provide the trustless transparency.

Companies may end up creating a bridge between public and private blockchains to create a hybrid that provides required transparency to the customers without losing the business secrets.

Existing public blockchains like Bitcoin and Ethereum face serious scalability issues, however, ramps are being built to address the scalability aspects. There are many supply chain blockchains in the market.

Most notably, VeChain has already been making strides in the space with partnerships with WalMart, DNV GL, PwC, BMW, LVMH, and a host of other partnerships.

The success of VeChain and similar companies is an indication of how blockchain is bringing efficiencies in the supply chain for the companies, helping them save millions of dollars while providing transparency to customers at no additional cost.

Talk about killing two birds with one stone!

Thank you for reading and sharing this article. Stay safe and healthy!

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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