Manufacturing Relocation

Since China and the US reached the phase one trade agreement in December 2019, frictions between the two countries have been tentatively alleviated. After the US started the trade war in March 2018, tariff increases and technology bans have intensified geopolitical tensions and affected global manufacturing supply chains. According to a survey of 239 US companies in China by the American Chamber of Commerce in China, 22.7 percent of these enterprises have decided to move their supply chains out of China, and 33.2 percent will postpone or cancel their investments in China. Business analysts predict that the pressure of manufacturing transference will mainly impact labor-intensive enterprises such as textiles, furniture and electronic devices. Thanks to the overall strength and volume of China’s manufacturing sector and its relatively complete industrial chain, China will remain competitive as an investment destination in the coming years.