China Is Losing Manufacturing Dominance As Companies Shift to Surrounding Countries

over the recent decades China acquired it status as the world's Factory and a manufacturing Hub of the world but only in the next coming years many experts n that China is going to lose this status to its surrounding countries as there is going to be a significant reshuffling of the manufacturing landscape in Asia us companies like Intel Microsoft Nike and Dell have all said they're considering moving some of its manufacturing out of China to improve quality reduce costs and alleviate supply cha

in risks a company in SHO that produces more than half of all iPhones has been expanding its operations to India and Vietnam with reports suggesting that India's share of total iPhone production could rise from less than 5% what it is today to 50% by 2027 knowing the previous video we looked at how cha got labeled as uninvestable by the foreign investors and even though we came to a conclusion that overall there isn't this massive Exodus of foreign companies leaving China despite the foreign dir

ect investment being at a two decade low it doesn't mean that there won be one in the future as there is a noticeable trend of emerging of China being seen as a less appealing manufacturing destination compared to its surrounding countries the European Union Chamber of Commerce in China reported that 2/3 of 570 companies surveyed set at doing business in China has become more difficult with one and 10 of those companies saying they have already shifted their Investments out of China things that

once made China an attractive destination for companies to Outsource their manufacturing to are the same reasons why companies are now leaving China once slow labor cost that attracted companies to China compared to other developed countries has been rising one supportive Chinese government that offered incentives to attract foreign companies has turned into unsupportive and unfriendly other countries such as Vietnam India Indonesia and Bangladesh have noticed this and began offering incentives

to attract these foreign companies that feel betrayed by China companies like Foxon are not only relocating for lower labor cost but more importantly they want a stable political environment to ensure unerupted production a luxury they don't have in China now it's worth noting that this trend is also apparent in the semiconductor companies who are also concerned about disruption in their supply chains and are also putting in efforts to diversify from China and for their destination they have cho

sen Japan seven of the world's largest semic makers have set out plans to increase manufacturing and deep and Tech Partnerships in Japan including giants like Taiwan semi Manufacturing South Korea Samsung Electronics a us-based Intel and Micron have all announced plans to increase their manufacturing capacities in Japan for instance Micon plans to invest $3.7 billion to build a plant in Hiroshima while Samsung is considering $270 million research and development center in Yokohama now in the pre

vious video we mentioned how the US Commerce Secretary Gina Rondo has brought up the issues that the US companies have had in China and one of those issues were the China's ban on the Micron Technology China said that the products made by the US memory chip giant Micron Technology are a national secur risk and has banned its products from Key infrastructure projects in the world's second largest economy Rondo said that there's no rationale given for the Chinese actions against ship maker Micron

as there wasn't any proof that Micron ships actually are a national security risk we firmly oppose restrictions that have no basis in fact following that Fiasco it makes sense why mcon is investing almost $4 billion into a new plant in Japan away from China for Japan this is a golden opportunity to reemerge as a semiconductor Powerhouse the Japanese government is supportive of these developments and has declared semiconductor as essential products they have also set aside a budget of 1.7 trillio

n yen to support the commitments made by these foreign companies now despite the rhetoric about Dr risking away from China the world's second largest economy is likely going to continue to play an outsized role in global trade and what the Aero Zone strategist say that they remain doubtful that another country could suppl China's role as a dominant World manufacturer due to the fact that smaller countries wouldn't be able to handle a rapid change that forces them to become manufacturing hubs on

par with China One figure illustrat raise the point china has a manufacturing labor force about 212 million more than the combined economies of the US the EU Japan Canada Korea India Mexico and Vietnam we wonder if the next China could actually be China no other country has the manufacturing capacity to supplant China looking ahead this trend of diversifying manufacturing locations is likely to continue especially as geopolitical tensions and economic considerations evolve in the long term this

shift and Manufacturing Dynamics could lead to a more multi-polar manufacturing World reducing the glob economy dependence on any single country