#Newspaper

COVID-19 Undermines China’s Run As The World’s Factory, But Beijing Has A Plan

// Over the past few decades the cost of production in China were so low that the occasional economic hiccup was merely the cost of doing business. Today, it’s enough to tip the scales.

//China has rapidly undergone a fundamental socio-economic transition, jumping from primarily being an export nation—a.k.a. the World’s Factory—to being a consumption, service driven economy.

//they devised a way to keep them firmly tethered to the motherland by creating a globe-spanning network of China-driven economic corridors, logistics zones, industrial parks and financial centers... the network was given a name in 2013: the Belt and Road (BRI).

//on closer inspection we see an array of China-driven ports and logistics zones that are almost invariably connected with new manufacturing zones that are slated to be filled with Chinese companies.

//It is not only international firms that are scaling back or leaving China in droves, but Chinese companies as well. They are not immune to the rising costs of production, stricter environmental regulations, and the added costs and uncertainty of trade war.

//The object is to stock these zones with Chinese manufacturers who can not only better access the markets they’re in and the U.S. and EU but also to ship cheaper produced goods and resources back home to China.

//The end of China’s role as the world’s factory is approaching, but this is what the Belt and Road was built for.

Source: Forbes, (26-Mar)
https://bit.ly/3bXa6v4

#OneBeltOneRoad #China #Economy #WorldsFactory #Coronavirus

#Newspaper

Coronavirus: Can India replace China as world's factory?

//With Covid-19 infecting millions across the world, China is facing an unprecedented global backlash that could destabilise its reign as the world's factory of choice.

//Its neighbour India has sensed an opportunity and is keen to make inroads to a space it hopes China will vacate sooner rather than later.

//China's weakened global position is a "blessing in disguise" for India to attract more investment

//"Covid will only accelerate the process of de-risking from China for many of these companies."

//The US-India Business Council (USIBC), a powerful lobby group that works to enhance investment flows between India and the US, also said that India has significantly stepped up its pitch.

//But things are still at an evaluation stage and decisions are unlikely to be made in a hurry.

//In an environment where global balance sheets are fractured, relocating entire supply chains is easier said than done.

//Another reason India might not be the obvious choice for global multinationals is because it isn't well integrated with major global supply chains.

//As things stand, Vietnam, Bangladesh, South Korea and Taiwan seem to be favourites to benefit from the backlash against China. The latter two at the "high-tech end of the spectrum" and Vietnam and Bangladesh at the lower end.

//Multinationals began moving production out of China into these countries nearly a decade ago due to rising labour and environmental costs. The slow exodus has only gathered pace as US-China trade tensions have increased in recent years.

//The time is ripe, say experts, for India to undertake broad-based structural reforms and use these sweeping geopolitical shifts to modify its trading relationship with the world.

Full article:BBC, (18-May)

#China #worldsfactory #India #supplychain #Coronavirus

https://www.bbc.com/news/world-asia-india-52672510