They are not completely moving out of mainland China but they want to set up additional production lines in the Southeast Asia countries.
In 2016, Deloitte and others had identified Malaysia, India, Thailand, Indonesia and Vietnam as the top new places for low-cost manufacturing. The MITI V was the acronym they gave to Malaysia, India, Thailand, Indonesia and Vietnam.
However, complex products that involve plastics, electronics, printing, packaging are things where China will remain dominant for the next ten years.
Since 2001, hourly manufacturing wages in China have risen by an average of 12% a year. The yuan exchange rate became 10% cheaper. The 25% tariffs is speeding up shifts from China by about a year.
China already has highly productive and skilled workers. China is increasing automation and capital equipment investments.
In 2015, China launched a Made in China 2025 strategic plan. They wanted to increase the Chinese-domestic content of core materials to 40% by 2020 and 70% by 2025. The plan focuses on high-tech fields including the pharmaceutical industry which are dominated by US, Japan and Europe.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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