China has been the “Factory of the World” for decades. But it could be changing soon.
Global manufacturers are rethinking their strategy and are moving their production away from China. Most of the shuffle of the supply chain is heading to other Asian countries, for example, Vietnam, Thailand, and India. Other options are onshoring production or nearshoring production, for example in Mexico.
While companies are adjusting their global manufacturing footprint, these reasons are often been considered:
- Geopolitical risks and threats
- Labor cost and availability
- Digitalization and automation
- Customer proximity
- ESG and sustainability
Nevertheless, no single country can replace China’s production capabilities. In today’s global supply chain, China is highly integrated as a supplier, a manufacturer, and a sales market.
