• Saturday, May 30, 2020

Factories and Business moving out of China

Discussion in 'China & Far East' started by MayaBazar, May 24, 2020 at 6:20 AM.

  1. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    It is now apparent that Factories and Businesses are moving out of China. Some are moving back to the countries of their origin while others are moving to alternate destinations.

    The purpose of this thread is to gather news about all such Businesses that are moving out of China.

    Some of the reasons for relocation include

    1) The minimum wage rates in China have substantially increased over the years

    2) The countries of origin like US, Japan etc. have allocated money for companies to relocate

    3) The countries of alternate destinations are providing incentives to new Businesses to attract them to relocate
     
    Last edited: May 24, 2020 at 6:37 AM
    • Thanks Thanks x 1
  2. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    https://defence.pk/pdf/threads/china-exit-japanese-firms-keen-on-moving-to-bd.667816/


    China exit: Japanese firms keen on moving to BD
    FE ONLINE REPORT | Published: May 23, 2020 12:16:12 | Updated: May 23, 2020 12:21:26

    [​IMG]Bangladesh and Japan flags are seen cross-pinned in the image, symbolising friendship between the two nations. — Collected Photo

    At least 34 Japanese companies operating in China have shown interest to relocate their units to Bangladesh.

    The embassy of Bangladesh in Beijing informed the development to the ministry of foreign affairs on Wednesday.

    Dozens of Japanese firms have planned to leave China on the grounds of trade war between the USA and China and the supply chain disruptions.


    Quoting JETRO officials in Beijing, the embassy said the 34 out of 690 Japanese firms registered in China have so far revealed the relocation plan following announcement of stimulus package by the Japanese government for the shift out of the mainland.

    It also said the JETRO officials recognised Bangladesh’s attractiveness as an investor-friendly destination.

    They, however, declined to name the Japanese firms willing to relocate from China.

    Earlier, the ambassador accompanied by high officials of the embassy called on the Japanese ambassador in Beijing Yutaka Yokoi to urge the Japanese side to prefer Bangladesh as a destination for relocation by their firms.

    Meanwhile, the Office of United States Trade Representative or USTR on May 13 last year released the list of 3,805 product categories that could be subject to tariffs of up to 25 per cent.

    Impacted by the US tariffs on Chinese-made goods, Japanese companies have started to leave China as the trade war launched by the Trump administration gets intensified.

    The Japanese firms that decide to relocate are mostly affected by the complete disruption to supply chain as well as the trade war that has hit hard the Japanese entities producing high-value products in China.

    Auto parts makers of Mazda Motor has decided to go to Mexico from the Jiangsu Province of China.

    Kasai Kogyo, supplier of Honda (interior door trim and roof part), is now planning to move from Wuhan to North America, Europe and Asia.

    Masudur Rahman, an official at the Bangladesh embassy in Beijing wrote the letter to an additional secretary of the ministry of foreign affairs.

    In the meantime, Sheikh F Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industry or FBCCI, wrote a letter to the country representative of the Japan External Trade Organisation on May 12 calling for facilitating the relocation.

    Japan has adopted a national strategy to be implemented during the post Covid-19 period to relocate its investment both at home and outside China.

    The FBCCI also wrote to the Confederation of Asia Pacific Chambers of Commerce and Industry to encourage its member nations to relocate firms to Bangladesh.

    jasimharoon@yahoo.com

    https://thefinancialexpress.com.bd/...apanese-firms-keen-on-moving-to-bd-1590214572
     
  3. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    i think all these companies will face decline in profitability and may face problems in developing new products as it is not good time to waste money on relocation during pandemic when demand of their products and revenue is already low
     
    • Thanks Thanks x 1
  4. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    https://defence.pk/pdf/threads/german-footwear-maker-to-shift-production-to-india-from-china.667914/

    • Casa Everz Gmbh has decided to shift its entire production from China to India
    • The German company has 18 manufacturing units with its 12 licensees across the globe, including Europe, with products selling in over 80 countries
    NEW DELHI : Casa Everz Gmbh, the owner of Germany-based healthy footwear brand Von Wellx, will be shifting its entire shoe production of over three million pairs annually in China to India with an initial investment of ₹110 crore, according to a top official of the company's licensee Iatric Industries Pvt Ltd.

    A new manufacturing unit will be set up with a production capacity of over three million pairs in Uttar Pradesh through a collaboration with Iatric Industries Pvt Ltd as part of an understanding with the state government.

    "Yes, after multiple rounds of discussions, Casa Everz Gmbh has decided to shift its entire production from China to India," Iatric Industries Pvt Ltd Director and CEO Ashish Jain told PTI in an e-mailed response.

    Casa Everz Gmbh had two manufacturing units in China with an annual capacity of over 3 million pairs.

    Iatric Industries already has a capacity of 5 lakh pairs for Casa Everz Gmbh specifically under which it produces Von Wellx Germany – 5 Zones Men's and Women's shoes apart from its other product capacities of another 5 lakh pairs, he added.

    "Now a new unit will be set up with a production capacity of over 3 million pairs. We have a 2-year time horizon to reach that capacity after all the necessary cooperation with the UP government," Jain said.

    When asked about investments, he said, "The investment in Phase 1 of the project will be about ₹110 crore over two years."

    "We also have a plan for phase 2, where ancillary industries will be set up for availability of high-quality raw materials like outsoles, special fabrics and chemicals which are not available in India right now and which will reduce raw material and footwear imports and improve the quality of Indian made footwear, attracting more investment," he added.

    Explaining the reasons for Casa Everz Gmbh relocating its production to India from China, Jain said footwear being one of the top labour intensive industries in the world with raw material and labour availability also driving its economic advantage, India offered advantage on both the aspects.

    "So, the lucrative opportunity from the government, the demographic dividend of India and raw material availability were the top three winners for India. We are working very closely with the UP government to help us in executing the whole plan," Jain said.

    He also said the company "chose India over other locations since it believes that India is going to be the next manufacturing powerhouse of the world if it is well supported by business conducive government policies".

    Casa Everz Gmbh has 18 manufacturing units with its 12 licensees across the globe, including Europe, with products selling in over 80 countries.

    Its products are healthy footwear based on the internationally patented '5 Zones technology' which was developed by German orthopaedic, Naturopath Dr. Walter Mauch. Von Wellx Germany – 5 Zones was launched in India in 2019 and is available at over 500 top retail locations and online in India, Jain said.

    To help manufacturers, specially footwear competes globally, he said, the company expects the government to design Special Zones where there is provision for easy availability of land, single-window clearances, easy policies for compliances, export incentives and tax holidays "so that we can produce the goods at extremely competitive prices and beat the companies from other countries".

    https://www.livemint.com/

    But you have to consider that

    1) The minimum wage rates in China have substantially increased over the years

    2) The countries of origin like US, Japan etc. have allocated money for companies to relocate

    3) The countries of alternate destinations are providing incentives to new Businesses to attract them to relocate
     
  5. FairAndUnbiased

    FairAndUnbiased SENIOR MEMBER

    Messages:
    5,329
    Joined:
    Nov 25, 2011
    Ratings:
    +2 / 7,140 / -2
    Country:
    China
    Location:
    United States
    Great, you discover your people's true role in this world: labor.

    Meanwhile Chinese naturally assume their intended role: intellectual pursuits. Even US defense and aerospace companies put R&D offices in China.

     
    • Thanks Thanks x 1
  6. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    these companies will lose chinese market and it will badly effect their profitability,wages in china are still less as compared to u.s,also if these factories go to other places they have to invest huge money on infrastructure,supply chain,training of labor which will badly impact them,i not expect that other countries are in position to finance them during current pandemic when they are also facing bad economic situation
     
    • Thanks Thanks x 1
  7. Thamizh Puli

    Thamizh Puli FULL MEMBER

    Messages:
    753
    Joined:
    Aug 24, 2019
    Ratings:
    +1 / 393 / -4
    Country:
    India
    Location:
    United States
    look at it this way - whether they shift or not, they all face losses and demand disruption.
    and times of low demand is actually the correct time to make sourcing changes

    and there are two other factors at work here :
    1. there are some countries / companies / people angry with China and want to move out regardless of cost
    2. there are others that may not be angry with China per se but have realized over dependence on China can put them at near existential risk ...and so will act to reduce that risk

    either case it is exit China. Xi Jinping is at risk of losing his legacy (the Hong Kong control act is a desperate attempt at plat b)
     
  8. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    Companies that are relocating back to the US or other developed countries are upgrading their tech i.e. 3D Printing, Robotics etc. So they will not increase the ongoing labor costs though they will require one time capital investment which will be amortized for the next few years.
     
  9. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    businessmen not consider rivalries of govt and are mostly more concerned over business instead of nationalism otherwise they never invested outside u.s in first place.products demand will remain as far as there is no alternative supplier in other countries and these companies have their own brand power which cannot be ended easily by promoting hate against china,end user not consider where they are produced ,they only want value for their money and fulfillment of their needs
     
  10. Thamizh Puli

    Thamizh Puli FULL MEMBER

    Messages:
    753
    Joined:
    Aug 24, 2019
    Ratings:
    +1 / 393 / -4
    Country:
    India
    Location:
    United States
    you don't know
     
    • Thanks Thanks x 1
  11. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    china also is investing in such technology and their labor and infrastructure is more suited for this
    indian illusions are very far from reality otherwise they were claiming to be superpower by 2020
     
  12. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    I know. The below video says it all. This is the primary reason why governments want their companies to relocate as they know that China has become a too big of a monopoly.

    Top Countries by High-Technology Exports 1988 to 2018



    Of course they are. Read my post here.

    https://defence.pk/pdf/threads/factories-and-business-moving-out-of-china.667921/#post-12358420
     
  13. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    if they invest in other countries then in next few years they will face more competitors arising from new companies in these countries thus more reducing profitability of their products
     
  14. MayaBazar

    MayaBazar FULL MEMBER

    Messages:
    542
    Joined:
    May 14, 2020
    Ratings:
    +0 / 260 / -7
    Country:
    India
    Location:
    United States
    China does not honor IP while other destinations do.

    Also, other countries are not as intelligent as the Chinese.
     
  15. Yaseen1

    Yaseen1 ELITE MEMBER

    Messages:
    8,527
    Joined:
    Apr 1, 2014
    Ratings:
    +3 / 7,598 / -8
    Country:
    Pakistan
    Location:
    Pakistan
    others will also do same otherwise they cannot become much strong economy and powerful country and will remain slave of west