Global Production Research

Insights into the New Manufacturing Locations

Selected business news articles on global production

This section provides web links to selected business news articles, focusing on the development, organisation and competitiveness of industrial operations in emerging economies.
Vietnam prepares for supply chain shift from China

This phenomenon of companies moving from China to Vietnam is just starting, and we will see an acceleration next year. Yet, many of them still have to rely on a supply chain from China. Infrastructure is not ready, logistics need to be improved and labour is no longer that cheap compared to its neighbouring peers. Nonetheless, multinationals are now building up their supply bases in a way that promises to take manufacturing closer to a level where it can be seen as China’s rival. | 28 December 2020

Indonesia is ready to take on the world's battery makers

Indonesian President Joko Widodo has repeatedly stressed his ambition to transform the country from a commodity-driven economy into an industrial economy, by means of a so-called massive downstreaming in the extractive industry. His administration's most recent move involves the establishment of a state-owned battery holding company to tap into the world's growing market for electric vehicle batteries. In addition, Indonesia has commenced discussions with two multinational vehicle makers with a view to persuading them to help develop the expected EV battery supply chain.

Nikkei Asia | 7 December 2020

Africa needs to follow Singapore, Japan to become a manufacturing hotspot

Southeast Asia has begun what looks like a new phase of exponential growth. The sustained enrichment of this region will transform the world, and carry important lessons for struggling countries like those in Africa. What Africa might need is its own Japan – a pioneering country that can industrialize first, and then invest in the rest of the continent. That country might be Ghana, which has strong institutions, political stability, and good education and literacy.

Business Standard | 5 December 2020

Apparel manufacturing: Trust in Turkey's track record

Boasting a strong textile and garment manufacturing sector, Turkey has a long history of working with high street leaders and big-name brands. Textiles and clothing are two core sectors of the Turkish economy, accounting for 17.5% of total export volumes in 2019. From cotton to final product, Turkey has a unique production capacity with manufacturers understanding the expectations of trade partners because of longstanding relations with European and UK companies.

Drapers | 3 December 2020

China is fast replacing Europe in global supply chain

The EU’s regional supply chain is shrinking fast, giving way to Asian manufacturers, led by China. Loss of EU competitiveness, especially dramatic in electronics, is linked to its lack of technological innovation and stagnant human capital.

Forbes | 2 December 2020

The myth of China's manufacturing decline

The idea that China has reached peak manufacturing and is now losing out to Southeast Asia and India is as persistent as it is misleading. Chinese manufacturing is in fact highly resilient, as demonstrated by its continued growth and global export competitiveness. Policymakers in Washington, D.C., and around the Asia Pacific should recognize that manufacturing in China has survived the Trump-era trade war and tariffs largely unscathed – and start preparing for the implications of the country's enduring leadership in making everything from cars to consumer electronics.

Nikkei Asia | 18 November 2020

Can India be the next global manufacturing hub?

The COVID-19 pandemic laid bare the vulnerability of existing global manufacturing supply chains. It is likely to lead to global suppliers rethinking the resilience of their supply chain networks. Can India take advantage of this opportunity to bolster its industrial and commercial base? This article sheds light on India’s manufacturing lag and discusses the various policy initiatives taken by India to strengthen its manufacturing sector. It concludes by suggesting some measures that could help India leapfrog into achieving the status of a global manufacturing hub.

Manohar Parrikar Institute for Defence Studies | 11 November 2020

Global manufacturers are flocking to Vietnam – is it ready?

Vietnam is enjoying an influx of foreign manufacturers, a trend that began after 2007 when low-end garment and shoe factories began to leave China and its rising costs. Now the country is hoping to become a major hub for high-tech manufacturing, as U.S. pressure on China is forcing a re-alignment of the supply chain that supports the computer, smartphone and telecom industries. But this shift has intensified strains on the Vietnamese workforce, its suppliers and land available for industry.

Nikkei Asia | 11 November 2020

Electronics supply chains are staying put in China – for now

For multiple years, electronics companies that sell into the U.S. market have faced pressure from tariffs to move their supply chains out of China. Savvy companies sought loopholes by moving small pieces of their supply chains, but most stayed put. The story remains the same: companies are choosing to work with trusted partners and aren’t making big moves out of China.

Forbes | 6 November 2020

Can Africa possibly take China's manufacturing jobs?

Africa’s industrial output has been increasing and is now on a trajectory to be doubled by 2030. The Chinese – masters of modern industrial transformation from whom Africa can learn – are playing a huge part in this change as they invest in about 150 new manufacturing ventures every year.

The Citizen | 29 October 2020

Can the Middle East become a manufacturing hub?

According to the World Bank, manufacturing added 14% to GDP across the Middle East and North Africa in 2018, up from 12.6% in 2016. Today, in line with various 2030 economic visions and the disruption of technologies, governments across the region are seeking to further promote manufacturing as part of their diversification strategies. Can they succeed?

Aerospace Technology | 7 October 2020

Vietnam to drive high-tech startups with new incentives

Vietnam will launch a program to accelerate the founding of startups in information technology and other high-tech businesses in a bid to boost the country's growth potential as Covid-19 weighs on the economy. The program is a set of incentives to encourage innovative startups engaged in telecommunications businesses, information technology, automation and other related businesses.

Nikkei Asian Review | 24 September 2020

Aerospace: GKN starts shipping engine parts from Malaysia factory

GKN Aerospace has shipped the first aero-engine components from its site in Johor, Malaysia. The site has an important strategic growth role in GKN Aerospace’s global manufacturing and development footprint in Asia and will also be home to additional capabilities including research and development activities around the application of additive manufacturing technology into engine parts repair.

Aerospace Manufacturing Magazine | 23 September 2020

Top 5 countries to become the world's next manufacturing hub

The US-China trade war has prompted many companies to re-examine global supply chains. A recent study by McKinsey Global Institute estimates that companies could shift a quarter of their global product sourcing to new countries in the next five years. In this uncertain trade environment, a growing number of countries are hopeful that they could replace China as the world’s next major manufacturing hub.

World Finance | 21 September 2020

"China exit" limited to some American sectors — and not for home

While nearly all companies in apparel and smartphones have moved, plan to move, or are considering moving at least part of their operations out of China, few companies in many other industries are doing so, according to a Goldman Sachs report. When asked about top locations for moving out of mainland China, Vietnam and India are the most mentioned destinations.

Nikkei Asian Review | 12 September 2020

China chipmakers speed up efforts to cut reliance on US supplies

China's top chipmakers are speeding up efforts to reduce their use of U.S semiconductor equipment as fears mount that Washington will impose further curbs on their operations as part of a tech war. They have also stockpiled several years' worth of inventories of some supplies from the likes of Applied Materials, a big U.S. equipment maker.

Nikkei Asian Review | 9 September 2020

Tata: Transforming a conglomerate for India and the world

While having become the UK’s leading industrial employer in a proud symbol of the shifting balance of 21st-century economic power, Tata is now facing calls from analysts and others to pull back and refocus on India, its home market, where rising incomes, consumption and internet use among the 1.4bn population make Europe look comparatively less promising. | 31 August 2020

Moving out of China? Not really

There are many factors in play regarding the question of doing business in China. The first one is increasing labor costs. However, even in the face of a disruptive trade war, a significant number of businesses have remained in China and established operations elsewhere as a hedge against total dependency on Chinese manufacturing. This is sometimes referred to as the “China +1” strategy.

Medium | 7 July 2020

China quadruples fundraising pace for chip-self-sufficiency

Chinese chipmakers have already raised more than twice as much from the equity market in 2020 than in all of 2019, with state-backed funds helping the nation's effort to boost domestic output. The threat of the U.S. cutting off supplies to China has fueled the stepped-up investment.

Nikkei Asian Review | 7 July 2020

Who will replace China — India or Vietnam?

Over the past two decades, China has served as the global production hub for companies in multiple industries, such as electronics, textile, medical devices, and automotive. The key factors have been the high availability of raw material, technological innovations, business-friendly laws, and accessibility to skilled labor. However, the scenario changed in 2019, when increasing cost of labor, as well as tensions created by the US-China trade war, clouded China’s perception as a favorable production center. | 24 June 2020

India chasing a fleeting manufacturing dream

The race among emerging economies to become the next global manufacturing hub has gained momentum in the last two years. The struggle for grabbing a larger share of the global manufacturing pie, inspired by economies envious of China’s growth driven by manufacturing, has gained impetus. This is due to the recent US-China trade tension, and the need to hedge supply chain risks in light of the Covid-19 pandemic.

ORF Observer Research Foundation | 7 June 2020

India's pharma and chemicals groups take business from China

The lockdown China imposed to combat coronavirus exposed vulnerabilities in companies’ global supply chains. Chemicals and pharma are two sectors in which India is well positioned to benefit by boosting self-sufficiency and increasing capacity. | 18 May 2020

US ban made Huawei turn to Chinese parts

For the Mate 30, Huawei's flagship model, parts made in China now form 42% of the total value of components, up from about 25% when Huawei was still able to buy from U.S. companies. American-made parts now represent only 1% of the total components value in Mate 30, down sharply from about 11%.

Nikkei Asian Review | 14 May 2020

How India can displace China in global manufacturing

As India’s attention shifts from bending the coronavirus curve downwards to rebuilding the economy, the government’s primary economic focus has been on short-term, stop-gap stabilisation measures. But the corona crisis has also presented India with a longer-horizon opportunity to expand its manufacturing base and play a larger role in revamped global supply chains.

The Times of India | 24 April 2020

Coronavirus pandemic tears holes in Asia's garment industry

Four months after its emergence in the Chinese city of Wuhan, the novel coronavirus has triggered an unprecedented crisis for Asia's apparel exporters who, thanks to the rapid globalization of the past decade, employ millions of workers and help underpin some of the world's most fragile economies.

Nikkei Asian Review | 3 April 2020

Is it time to rethink globalized supply chains?

The Covid-19 contagion has had a major impact on Chinese manufacturers, and because of the central role many Chinese companies play in the supply chains of other companies, the impact is being felt around the world. The disruption is particularly acute in the electronics and auto industries, but it is also affecting pharmaceuticals, metals, and a wide range of consumer and industrial products.

MIT Sloan Management Review | 19 March 2020

China remains world factory despite coronavirus outbreak

The coronavirus outbreak is expected to drive many manufacturers, especially those in the electronics sector, to accelerate production relocation from China and rearrange their capacity globalization deployments. But China will remain a global manufacturing powerhouse with unrivalled advantages, including huge domestic demand.

DIGITIMES | 2 March 2020

Africa – why the forgotten continent can be the next "global factory"

Over the past two decades, low-cost manufacturing has transformed China and a group of other developing countries including Thailand and Vietnam. Now, it’s Africa’s turn. That will sound unlikely to the many people who see Africa as synonymous with extreme poverty, conflict and instability. But anyone who understands the nuances of the vast continent knows that African countries are well placed to grab a bigger share of global manufacturing in the coming years. Six of the 15 fastest-growing economies in the world are in Africa and the continent has become a must-visit destination for the titans of the U.S. tech industry.

IndustryWeek | 28 February 2020

A manufacturing strategy built for trade instability

Companies that have been relying on Chinese factories to supply the US market, for example, must choose from among several strategic options. Should they shift production to North America, where costs may be slightly higher but where they can reduce their risk of exposure to fallout from geopolitical intrigue? Should they hunt for other low-cost offshore locations? Or is the wisest course over the long haul simply to stay put and see how the new world trade rules play out?

Boston Consulting Group | 13 February 2020

Asia's economies must learn to accommodate the rise of robots

Robots are replacing labor, transforming production processes and turning labor-intensive industries into capital-intensive ones instead. With an increasing reliance on robots to implement a growing number of production functions, countries such as Bangladesh, Vietnam and Cambodia are losing their cost advantage, not in competition with each other but in competition with machines and robots. This development underscores a need for technology enhancement and the acquisition of skills to shift to activities that cannot be done more cheaply by machines. And it requires government involvement in the provision of training and the development of supportive infrastructure.

Nikkei Asian Review | 5 February 2020

India's exporting malaise weighs on sports goods makers

With the US raising tariffs on Chinese goods, manufacturers have relocated to other Asian nations, such as Bangladesh and Vietnam, that have enjoyed robust export growth as a result. Analysts believe India has been unable to capitalise on the trade war because a lack of scale, poor infrastructure and tough land and labour laws limit India’s attractiveness. "There hasn’t been that focused intervention on the part of the government to make these [manufacturers] more efficient," said Biswajit Dhar, a trade economist at Jawaharlal Nehru University. Manufacturers leaving China "are not coming to India. They’re going to south-east Asia, and even Mexico, but not India." | 22 January 2020

US tech backlash forces China to be more self-sufficient

Since the start of 2019, Washington has used sanctions to cut Chinese companies out of US supply chains, denting the telecoms group Huawei, China’s supercomputer groups and eight of the country’s leading artificial intelligence surveillance companies. The result has been a decisive shift in China’s approach to the industry. Beijing is accelerating its drive for technological "autonomy" to boost its control over its own supply chain in the face of political risks, such as further US embargoes. | 15 January 2020

Malaysia is a manufacturing marvel

Manufacturing is the bedrock on which the modern Malaysian economy was built. But to enjoy a good chunk of the world’s manufacturing pie, Malaysia needs to concentrate on high-tech, high-value manufacturing with an emphasis on robotics, artificial intelligence and automation. Low value, labour-intensive manufacturing is a lost cause.

Free Malaysia Today | 26 December 2019

Offshoring slows as wages rise in some emerging economes

According to a recent McKinsey report, the image of globalisation as companies searching for the lowest labour cost around the world is increasingly outdated. Instead, companies are looking at a whole range of factors, like the talent base and workforce, the quality of the infrastructure and logistics, and the ability to tap into innovation ecosystems. Also, growing importance is attached to the speed to market as consumer tastes change rapidly. | 19 December 2019

Has the "Make in India" campaign run out of steam?

Beyond pockets of success such as smartphone production, some manufacturers and analysts fear that "Make in India" is struggling to live up to its lofty expectations. Manufacturing as a share of Indian gross domestic product has stagnated at 15 per cent, despite Mr Modi’s aim of increasing it to 25 per cent. Foreign direct investment into manufacturing is lower than in 2015, after the prime minister’s first year in office. | 19 December 2019

Polish companies turn to robots as labour shartage bites

While many companies rely on migrants top plug gaps in the labour force, Poland’s more forward-thinking companies are increasing spending on automation. Overall, however, Poland has some catching up to do. A recent report by the Polish Economic Institute (PIE) found the country had 42 robots per 10,000 workers. That lags behind not only Europe’s economic titan Germany (338), but Poland’s regional peers Hungary (84) and the Czech Republic (135). | 17 December 2019

Why Indian groups are struggling to compete with China

India has never enjoyed the economies of scale that its giant neighbour benefits from. Policies on land and labour and its dysfunctional infrastructure are also among the reasons why it has been unable to take advantage of the tensions between the US and China to attract multinationals seeking to shift production away from the mainland. A weak manufacturing sector is, in turn, making India more protectionist in terms of global trade. | 26 November 2019

How the death of fast fashion is transforming Asia's garment industry

The garment industry is investing millions of dollars per year in new technology and new processes, as shifts in consumer demand reshape the sector. The days of stack-them-high, sell-them-cheap "fast fashion" are coming to an end, replaced by a new model which favors speed, precision, traceability and adaptability over bulk. To adjust, suppliers are moving their centers of production across borders to be closer to infrastructure, raw materials and their eventual markets, allowing them to shave precious days off their turnaround times. They are also investing heavily in automation and digitization, as the technology becomes more advanced and competitive with the cheap labor that has sustained the industry.

Nikkei Asian Review | 20 November 2019

Why Indonesia is missing out as companies move out of China

Indonesia is Southeast Asia’s biggest economy, with one of the biggest labor pools in the world. But it punches beneath its weight when it comes to attracting foreign investment. As companies increasingly look to move production out of China to avoid U.S. tariffs, they are largely bypassing Indonesia in favor of nimbler neighbors such as Vietnam and Thailand. Newly sworn-in for a second term, President Joko Widodo is renewing efforts to clear bureaucratic and regulatory roadblocks to make the country more investor-friendly and create new jobs.

Bloomberg | 7 November 2019

Southeast Asia moves from world's factory to regional powerhouse

From the fallout from the US – China trade tussle, Southeast Asia could ultimately gain more than it loses. As a growing region of 650 million people with a combined gross domestic product approaching USD 3 trillion, Southeast Asia has provided the heft for what has come to be viewed as "Factory Asia". Recently, there has been a rise in investment flows within the region from indigenous companies expanding their activities in neighboring countries, marking an important shift toward what could be called "Market Asia".

Nikkei Asian Review | 10 October 2019

India is trying to create an indigenous chip-making industry

Information technology can make a good claim to being India’s biggest and most successful industry. Tech hubs such as Bengaluru and Hyderabad contribute more than 13% of GDP and the country’s computer-science graduates are lauded worldwide. Yet although many Indians work with computers, very few are employed in building them. Since India depends entirely on imports in an era in which many countries are increasingly capricious about what goods they will be allowed to export, the country is attempting to build its own chips.

The Economist | 10 October 2019

China's pharmaceutical industry is growing up

In 2016, China became the world’s second-biggest drug market. In 2018, sales reached USD 137 billion, doubling in just six years. They are projected to be worth half of America’s by 2030, up from a quarter now. Much of this will come not from foreign drugmakers but domestic ones. At the same time, Chinese firms, which have historically produced copycat drugs for domestic use, will increasingly sell innovative treatments for everyone.

The Economist | 28 September 2019

Developing economies can become engines of growth

Technological change and disruptive business models are shifting global growth to fields such as fintech, big data analytics, advanced robotics, cybersecurity, precision medicine, and agritech that will generate trillions of dollars of global output by 2030. Such digital sectors are more accessible to the developing world’s innovators and entrepreneurs than high-tech manufacturing. Much of the required knowledge and advanced tools in these emerging sectors are available free or at low cost through digital platforms, and many key skills are learnt through general education, entrepreneurial drive and an understanding of local markets. | 24 September 2019

Why Africa's industrialization won't look like China's

China designed and executed a policy that shrank the industrialization process in a mere 25 year ? something that many economies took at least a century to do. Over the last few years, African leaders have been pursuing policies designed to mimic the path China took, positioning the manufacturing sector as a fulcrum to attract investments and create new jobs. However, the things that worked for China will not work for Africa. As discussed in this article, Africa can find the paths to industrialization, but in ways that do not mimic China’s.

Harvard Business Review | 4 September 2019

Homegrown Chinese fashion comes into style on world stage

The rise of Chinese fashion across a range of prices from affordable to high end is putting pressure on international brands in an already competitive Chinese market. And as more Chinese fashion companies set their sights on the West, the pressure could go global.

Nikkei Asian Review | 28 August 2019

Pakistan garment makers chase rivals in India and Bangladesh

Pakistan garment companies are fighting hard to break into the supply chains of some of the world's biggest fashion brands as the country races to catch up with Bangladesh and other Asian apparel heavyweights. The battle is fierce, however, as customers like Zara and H&M demand high quality and low costs from their suppliers, all on increasingly tight time tables.

Nikkei Asian Review | 25 August 2019

Trade chaos places spotlight on promising new players

While trade tensions with China have disrupted many U.S. supply chains, analysts suggest that a recalibration of shipping and sourcing destinations is long overdue. Emerging markets might finally live up to their potential and keep globalization on track.

Logistics Management | 12 July 2019

Southeast Asian aerospace takes off on back of budget airlines

Southeast Asia is building a reputation as a producer of aircraft components, parlaying jet demand from the region's low-cost carriers. The region as a whole made the equivalent of USD 14 billion in aircraft parts and related services in 2018 and is expected to become an even bigger player as global supply chains shift toward the region.

Nikkei Asian Review | 8 July 2019

The high price of beaking up global supply chains

The news that Apple is asking suppliers to evaluate diversifying their production capacity out of China signals a major shift in how we will be thinking about the globalization of manufacturing in the years ahead. It marks the beginning of a much more regionalized world in which the companies running production supply chains will have to factor in international politics to a much greater degree than before, and not just the cost, speed, and efficiency with which things can be made in a particular country.

Nikkei Asian Review | 2 July 2019

Apple weighs 15% – 30% capacity shift out of China amid trade war

Apple has asked its major suppliers to evaluate the cost implications of shifting 15% to 30% of their production capacity from China to Southeast Asia as it prepares for a fundamental restructuring of its supply chain. This has been triggered by the protracted trade tensions between Washington and Beijing. But even if the spat is resolved, Apple has decided that the risks of relying heavily on manufacturing in China are too great.

Nikkei Asian Review | 19 June 2019

Trump's trade war is making Mexico great

If high tariffs persuade manufacturers to leave China, they won’t move to the United States. Mexico in particular stands to gain because it is easier and cheaper for U.S. companies to relocate manufacturing there than to build new factories elsewhere for the kind of goods now produced in China. Mexico has the infrastructure from years of trading under the North American Free Trade Agreement, as well as ease of transport to and from the United States.


"Made in China" is still a key link in global value chain

According to a recent study by HSBC, "There is little evidence of a systemic spike in the number of firms shifting production away from China in the wake of the trade dispute". Some companies are looking to set up export manufacturing capacity elsewhere, but for most, the advantages of "Made in China" outweigh the risks. With a globally competitive supply chain eco-system, growing domestic consumption and an optimized business environment, China will continue to appeal to investors worldwide.

Global Times | 29 April 2019

Private-label products shed low-quality image in China

Private-label products are proliferating in China as their quality improves, and they are increasingly seen as delivering good value. In the past, many domestic products were unpopular in China because they were seen as shoddy. Imports, by contrast, though more expensive, were seen as top notch. But the era of blind loyalty to foreign brands is ending as consumers begin to notice that Chinese companies, too, can make fine products.

Nikkei Asian Review | 22 April 2019

Southeast Asia may not be the next "factory of the world" even as production moves away from China

The U.S.-China trade dispute is pushing American multinational companies to relocate their factories and adjust their supply chains. However, while some assembly lines are likely to move to other Asian countries, Southeast Asia will not become the factory of the world in the way China did two decades ago. According to a survey by Bain and Company, there is a shift away from consolidated global manufacturing hubs to a more fragmented manufacturing footprint with companies making their products in various facilities closer to their consumers.

CNBC | 8 April 2019

Apple's Chinese suppliers overtake US for the first time

Apple now has more mainland Chinese and Hong Kong-based suppliers than ever before, with the number surpassing American and Japanese companies for the first time despite the ongoing trade war. The rapid rise of Chinese companies in Apple's supply chain highlights the country's remarkable technological advancement over the past few years, as Apple demands world-class quality from the makers of parts going into its products. Analysts are divided, however, over whether the trade war will eventually slow or even reverse this trend.

Nikkei Asian Review | 18 March 2019

Chinese toymakers shift overseas as trade war bites

Toymakers are stepping up efforts to diversify beyond China to combat rising costs and the looming possibility that the U.S., the industry's biggest buyer, will impose punishing tariffs on toy imports. Chinese toys have long enjoyed zero tariffs in the U.S. While only a very few toy categories, such as children's bicycles, are subject to the 10% punitive tariffs imposed so far, some international buyers are calling for a shift away from production in China.

Nikkei Asian Review | 25 February 2019

Moving supply chains out of China isn't so easy

For decades, China has dominated supply chains, with most manufacturing countries following a “China Plus One” strategy for sourcing, or diversifying their operations by adding another location in Asia. But when companies add to their supplier base it introduces other variables that can offset the benefits of simply leaving China behind.

Sourcing Journal | 29 January 2019

From bikes to phones, "Made in Viernam" grows with foreign help

Vietnamese companies are branching out into new areas, in line with the government's goal of establishing the country as a manufacturing powerhouse by 2020. Real estate conglomerate Vingroup has started manufacturing electric motorbikes and smartphones and is set to enter the car industry in June. VinFast, a Vingroup unit, began selling its first electric motorbike in November. Designed in the mold of Italy's Vespa, the Klara is a stylish, well-manufactured bike that can cover up to 80 km on one charge.

Nikkei Asian Review | 13 January 2019


Copyright © 2003 - 2024 Global Production Research Inc.

Legal Notices