Global businesses 'wary of China supply chain risks'

Large businesses are worried by the prospect of a natural disaster in China causing severe supply chain disruptions on a global scale, according to new research.

The survey by FM Global found that a major catastrophe comparable to this year's tsunami and earthquake in Japan would leave many companies exposed, as 86 per cent said they are currently more reliant on China than Japan for their supply chain.

In addition, 95 per cent of those firms dependent on Chinese suppliers admitted they are concerned about the potential for natural disaster-related disruptions.

Professor Vinod Singhal at the Georgia Institute of Technology's College of Management described the findings as "a wake-up call for companies that have substantial investment and dependency [on China]".

He added: "A natural disaster-related supply chain disruption in China would have far-reaching and long-lasting negative economic impact."

The survey follows a recent report by Ernst & Young, which suggested the balance of global business will shift permanently to the east over the next decade.

According to the firm, China and India stand to account for nearly one-fifth of global trade flows by 2020.