[PSS Insight®] 2021 China Procurement Report

China is the world‘s second-largest economy, and the only major economy to report positive GDP growth when the virus exacted a devastating global toll. Chinese entrepreneurs are still full of hope for the future. The McKinsey Global Institute’s (MGI) new China-World Exposure Index shows that in the past 10 years, the world’s relative exposure to China has increased, while China’s to the world has fallen.

With changing business dynamics and increasing layers of complexity, procurement organizations need to work closely with strategic suppliers and partners to drive continuous improvement.

Despite challenges, Chinese businesses remain optimistic. The McKinsey Global Institute’s “China-World Exposure Index” shows that while the world's reliance on China has grown, China's reliance on the world has decreased. Procurement teams must collaborate closely with strategic suppliers, focusing on digital transformation, sustainability, and risk management to drive continuous improvement.

Key trends include managing the 'chip scarcity,' which has shifted priorities from cost to ensuring continuous supply and reducing risks. Commodity inflation and energy policies also impact procurement strategies, pushing for faster digital transformation. Sustainable procurement is essential for achieving carbon neutrality and fostering new growth areas.