Author Topic: Trade War Casualties: Factories Shifting Out Of China  (Read 1298 times)

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Trade War Casualties: Factories Shifting Out Of China
« on: December 16, 2018, 09:26:30 AM »
Trade War Casualties: Factories Shifting Out Of China
Kenneth Rapoza
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https://www.forbes.com/sites/kenrapoza/2018/07/30/trade-war-casualties-factories-shifting-out-of-china/#202c47a3103e

China-based manufacturers were already in the process of moving to lower-cost Southeast Asia. Now that trade tariffs have been enacted on at least $50 billion worth of goods, and another $200 billion likely by summer’s end, they are shifting their supply chain. It’s happening.

“With recent tariff battles, companies aren’t as eager to have production in China,” says Nathan Resnick, CEO of startup company Sourcify. The business-to-business manufacturing platform has offices in San Diego and Guangzhou. “We run production runs in India, Bangladesh, Vietnam, Philippines and Mexico right now. Labor costs are actually more affordable outside of China, so for products like apparel where there is a lot of cut-and-sew labor, most companies are moving out of China anyway,” he says. Sourcify raised $2.5 million through Y Combinator this winter. “I’ve been going back and forth to China for years, and it is getting more expensive. With all these tariffs coming, why not run some of your production runs elsewhere? Companies are saying that the scare of these tariffs has decreased the incentives to manufacture in China.”

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“Our clients have been shifting part of their production lines as early as March from China to other Asian countries where they already have manufacturing plants,” William Ma Wing-kai, Kerry's managing director, was quoted saying in the Hong Kong daily. “This is a reallocation of global production bases,” Ma said.

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Re: Trade War Casualties: Factories Shifting Out Of China
« Reply #1 on: December 18, 2018, 11:18:45 PM »
Pegatron shifts from China to Indonesia as trade war bites
Leading iPhone assembler accelerates diversification strategy
LAULY LI, Nikkei staff writer
DECEMBER 05, 2018 19:02 JST

https://asia.nikkei.com/Economy/Trade-War/Pegatron-shifts-from-China-to-Indonesia-as-trade-war-bites

TAIPEI -- Key iPhone assembler Pegatron has chosen Indonesia for its first diversification of manufacturing away from China in the wake of costly trade tensions between Washington and Beijing.

The Taiwan-based electronics manufacturer is preparing to shift production of non-iPhone products hit by U.S. tariffs on Chinese exports to a rented factory on Indonesia's Batam Island within the next six months.

A source with knowledge of the plan said the products -- which include set-top boxes and other smart devices -- accounted for close to $1 billion in annual revenue. Investment would start within the month, with full production expected by the middle of 2019, the person said.

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