Inflation is sweeping the rest of the world. It’s a good thing people are buying less of stuff they don’t absolutely need.
Probably a symptom of the “once in a lifetime” depression we’re going to enter.
Lots of companies have pulled their manufacturing out. Or at least some of it so they aren’t totally tied to them with no alternative. Unfortunately they are still a massive manufacturing hub regardless.
It’s pretty much cosmetic. Companies are doing final packaging in neighbouring countries, with the key components still being sourced from China. Ironically, this means the push for decoupling is making China’s neighbours more economically dependent on China, not less.
One step at a time. When manufacturing moved out of the USA. The assembly/most labor intensive went first then later the supply chain. The same thing is happening with China. We started to built our first finished goods factory in Vietnam in 2007, we developed some local component suppliers a few years after that. Every couple of years another component is either moved to Vietnam or sourced from somewhere other than China. We now have three finished goods factories in Vietnam, six component suppliers in Vietnam, and another six outside of China. We are gradually untangling ourselves from China.
They pulled out not for political reasons though, but for economical
Or were forced out due to pressures in the country. We were being forced to move out of the Shanghai suburbs and into a neighboring developing province. As a result we moved the bulk of our manufacturing to Vietnam with a limited amount of production still in China.
They completely shut down almost any inbound flight for foreigners for almost three years. A western company producing overseas can’t base their products only relying on a video chat with the factory. If it’s just Alibaba rebrands ok, but for anything else you need to physically go in the country, meet suppliers, touch and see the materials, inspect the goods, watch if preproduction is ok. Do everything remotely is insane.
Everyone moved production to neighboring countries like Vietnam not because of political issues but because at any time a manager can just take an airplane and go to see what’s going on instead of relying on emails and samples sent by FedEx.
China peaked a few years ago. Good.
This is the best summary I could come up with:
China’s imports and exports fell more sharply than expected last month as weaker global demand threatened the recovery prospects of the world’s second-largest economy.
China’s economy grew just 3% last year - apart from the slowdown when Covid struck, the weakest rate since 1976 - reflecting the toll from coronavirus restrictions that remained some of the most stringent in the world, long after many other countries had resumed more normal patterns.
Weaker economic growth overseas has also reduced foreign demand for Chinese goods, while geopolitical tensions between China and the US and others have taken a further toll on trade, encouraging international firms to shift investments out of the country.
China’s position as a major importer also means its sluggish trade performance is likely to have a knock-on effect on the global economy, said Steve Clayton, head of equity funds for investment firm Hargreaves Lansdown.
Prices for commodities from oil to copper slipped in response to the news, while shares in luxury goods producers such as LVMH - which have long looked to China for growth - also dropped.
China’s central bank has cut interest rates in recent months in a bid to boost the economy and regulators have also relaxed their scrutiny of key sectors such as the tech industry.
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