Christopher Tang

Opinion | India won’t be replacing China as the world’s factory any time soon

Questions have been raised about China’s long-term growth prospects as some Western firms diversify production away to rivals such as India

But China’s manufacturing has rebounded and remains a vital part of the global supply chain with dominance in key sectors such as solar panels and lithium batteries

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Robots conduct welding work at an automobile manufacturing factory in Qingdao in east China’s Shandong province on January 14. In February, China’s manufacturing activity rebounded to its highest in more than a decade. Photo: Xinhua

Christopher Tang

Published: 10:00pm, 9 Mar 2023Updated: 12:27am, 10 Mar 2023

Will China’s meagre growth last year be the beginning of the end of its dream to overtake the United States as the world’s largest economy? Forecasts of when this is expected to happen have been pushed back, to 2035 from around 2030, after China’s economic slowdown over the last few years.

However, this year, China is pulling out all the stops to resume economic growth after ending its zero-Covid policy in early December. Last month, its manufacturing activity rebounded to the highest in more than a decade.

While it may still take some time for China to get its economic engine going at full steam again, the country can confidently expect to continue to be the world’s factory for now.

At the start of the pandemic, China focused on curbing the spread of Covid-19 and saving lives, especially those of the unvaccinated elderly. But its zero-Covid policy also wreaked havoc on its economy, disrupting both supply and demand for industries ranging from consumer durables to consumer non-durable goods.

The unpredictability of lockdowns in many cities disrupted not just the lives of tens of millions of people, but also crucial supply chain operations. As China’s supply chains became less reliable and geopolitical tensions between the US and China intensified, some multinational firms started to shift their production bases away from China.

Google has reportedly been moving some production for its latest Pixel phone to Vietnam while Apple’s latest iPhones will increasingly be made in India. Amazon is also making Fire TV devices in India, while Microsoft has reportedly been shipping Xbox game consoles from Vietnam.