Video : The Era Of China’s World Factory Has Come To An End

not necessarily a bad thing

they can take the next stop and become manufacturers

digital industries are rising fast there

'The likes of Malaysia and Vietnam are often predicted to be winners from decoupling, able to hoover up western businesses as they leave China.

There are problems with this account, however, the first being that so far decoupling has barely begun to happen. Semiconductors are one notable exception, given successful American attempts to stop global chipmakers selling to China. But for all the talk of supply chain de-risking and resilience, similar moves in other sectors are hard to spot.

Western multinationals talk more often about a “China plus one” strategy, in which they keep making things in China but also pick another manufacturing base, Malaysia say, as a hedge.

Take Samsung. Its decision in 2020 to shift production to Vietnam means the South Korean giant now assembles millions of phones in Vietnamese factories each year. Many are then exported to the west. Many components that go into those phones are still made in China, however, so Vietnam must also import more of those too.

Vietnam’s bilateral trade with China has rocketed in recent years, with similar patterns discernible in the rest of what is sometimes called “factory Asia”. Forthcoming research from Aaditya Mattoo, an economist at the World Bank, suggests that east Asian nations have lately been exporting more to the US but also importing much more from China.'

These random propaganda videos are funny. The reality is that China is simply steadily moving up the value chain like Japan in the past, the labour-intensive industries (like assembly, clothes, etc.) are migrating to cheaper countries like Vietnam but at the same time these countries become even more dependent on China because they need components or machinery from China. This is supported by the fact that ASEAN in the last years became the biggest trading partner of China, demand for Chinese exports there grew by 35% (!!) YoY in March despite the global economic slowdown.