With the constant promotion of globalization, companies have expanded their supply channels and sales network to the whole world, putting more importance on supply chain risks. Based on the precautionary motive for firms’ holding cash (Keynes, 1934), the thesis put forwards the first two hypotheses of the thesis: 1) keeping other variables the same, when the upstream risks of a company get higher, there will be an increase in the company’s cash holdings; 2) keeping other variables the same, when the downstream risks of a company get higher, there will be an increase in the company’s cash holdings, where the thesis utilizes the percentage of the cost from top 5 suppliers to describe the upstream risks and the percentage of revenue from top 5 clients to describe the downstream risks.The research utilizes the balanced panel data from CSRC (China Securities Regulatory Commission) manufacturing industry companies (3305 public companies in total) from 2015 to 2021, from the Wind database, an authoritative database of Chinese public companies. Then, the research utilizes a multi-linear regression model with fixed-effect to test the first two hypotheses. As a result, the experimental results are consistent with the hypotheses that a one percentage point increase in upstream and downstream risks (the percentage of major upstream suppliers) would result in an increase in the company's cash holdings of around 9 million RMB which has passed 10% t-test keeping other variables controlled. Moreover, the thesis chooses the Chow test to test whether the structure of the effects has changed before and after the outbreak of Covid-19 (hypothesis 3), and the Chow test results show that it did.