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United States
OpinionChina Opinion
Chris Pereira
Chris Pereira

The View | As supply chains shift away from China, others get their own economic miracles

  • As global supply chains are reshaped, countries such as Vietnam and Mexico are becoming attractive manufacturing hubs
  • Chinese-backed factories in the US might face resistance, but the job growth and knowledge transfer they bring will benefit the American economy

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A worker helps make adapters on a production line in a plant in the Vietnam-China Economic and Trade Cooperation Park in 2019. Photo: Cissy Zhou
Chris Pereira
As global supply chains divide and expand out of China, including for geopolitical reasons, other countries are taking on a bigger role in supply chains linked to China. Chinese companies often gain little from this beyond continued access to Western markets, but the biggest beneficiaries are the countries taking on manufacturing roles with significant investment, job creation and knowledge transfer from China.
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Over the four plus decades since China’s reform and opening up, the country built some of the world’s largest and most important supply chains. Much of this manufacturing takes place in the Yangtze and Pearl River deltas, where factories and industrial estates, roads, bridges, ports, railways and other infrastructure combine with a large workforce making socks, smartphones and everything in between.

These supply chains evolved, most prominently in cities like Shenzhen, as companies and industries went from only assembling goods to designing, manufacturing and shipping globally leading products.

But just as China’s industrial capacity is nearing the height of its prowess, many parts of the supply chains are shifting abroad as trade restrictions in Western markets reshape entire industries.

To maintain sales in these markets, Chinese companies are investing huge sums and building manufacturing facilities in places like Vietnam, Indonesia, Mexico and even the United States. The world’s factory is turning on a dime to bring factories to the rest of the world.
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This massive shift in trade is often discussed in terms of how it’s impacting prices, the American consumer market, the Chinese economy or the cat-and-mouse game of US policies trying to curtail Chinese goods entering the country. But what’s often left out of the discussion are the benefits received by these new manufacturing countries. The most immediate and obvious benefits are investments and job growth in these third-party countries.

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