The Changing Landscape Of Global Manufacturing – The man works at the Maxport factory in Hanoi, which manufactures activewear for various textile clothing brands. “Friend-shoring” has resulted in many companies exporting to the United States. what you do. Market to choose Vietnam, Mexico and India over China. Photo: Asia Times Files/AFP/Nhac Nguyen
The 10th anniversary of the Belt and Road Initiative (BRI) in Beijing on October 18 saw the usual smiles and handshakes. But China’s economic landscape, which depends on a strong supply chain network, faces turbulent times.
The Changing Landscape Of Global Manufacturing
The administration of US President Joe Biden, meanwhile, has continued to expand policies that limit China’s access to the United States.
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Foreign direct investment in China will also drop by 43% by 2022, while in the United States For example, Italy, which joined China’s BRI in 2019, announced its withdrawal from the project in April .
Meanwhile, the Netherlands began imposing restrictions on semiconductor exports to China in March. The arrest of two Canadian businessmen in 2018, widely seen as retaliation for Canada arresting Huawei CFO Meng Wanzhou at Washington’s request, has made foreign executives increasingly hesitant to travel to China.
Beijing’s biggest concern, however, is the threat to China’s manufacturing and export-based economic model, which has driven China’s economic growth for most of the 21st century. In the first half of 2023, China’s share of the United States
Part of this decline can be attributed to “re-shoring” policies that encouraged American companies to build factories in the United States. USA, where European companies also promote local production.
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Economic decoupling initiatives have also encouraged Western companies to establish manufacturing infrastructure in friendly or neighboring countries, often referred to as close or friendly ties.
Countries like Vietnam, Malaysia, Taiwan, Indonesia, India, Mexico and others compete for the attention of Western companies by offering subsidies, tax breaks and other benefits. The latest iPhone was assembled in India, for example, and more than half of Nike’s shoes are now made in Vietnam.
However, according to Bank of America, Mexico is ready to make the most of this “opportunity of a lifetime.” And the USMCA Free Trade Agreement with the United States. what you do. And Canada has forced American companies to increase production in Mexico.
Along with the increasing automation of the United States
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However, China’s manufacturing dominance as the “factory of the world” remains stable enough to sustain its economy. Its share of global production has increased from 26% in 2017 to 31∞ in 2021 (indicated by the global decline in production in the years before and during the Covid-19 pandemic), although India , Mexico and Vietnam contributed only 3.1.5% and 0.6% respectively.
China’s share of global manufactured exports also increased from 17% to 21% over the same period, and despite a slight decline in bilateral trade, US-China trade is set to rise to a record in 2022 .
China’s resistance to global supply chain changes can be attributed to strategic infrastructure investments that have streamlined China’s manufacturing and export operations. Efficient ports, wide highways, reliable rail systems, well-established industrial parks, stable governance, a large working-age population, and other factors set China apart from potential competitors.
Although the value of production in the United States it. has risen and added 800,000 manufacturing jobs over the past two years, for example, has not kept pace with job growth in other industries and the share of manufacturing in the United States. GDP continued to decline. . It is also feared that the United States by 2030, there will be a shortage of 2.1 million skilled manufacturing workers.
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India faces the challenges of cheaper imports, high input costs, taxes and regulatory hurdles, while Mexico struggles with cartel corruption and instability, and Vietnam grapples with blackouts and bureaucratic red tape.
Instead, many of China’s manufacturing competitors have chosen to work with China, reinforcing the traditional dependence on the supply chain that Washington is trying to break. This is most clearly exemplified in Mexico, where conditions are favorable for the United States. The companies have also made it an attractive destination for Chinese companies looking for a gateway to the United States.
In particular, 80% of the land leased to foreign companies in Mexico’s industrial parks is now in the hands of Chinese companies (compared to 15% for American companies), allowing Chinese goods to be delivered for final assembly before being exported to the United States.
This phenomenon extends beyond Mexico. By the end of 2022, the United States will be. The Commerce Department found that major solar suppliers in Southeast Asia do not exchange Chinese products before shipping them to the United States. Across the region, Chinese greentech companies are making significant inroads into manufacturing infrastructure.
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Even Vietnam, despite its ongoing and historical tensions with China, has cautiously embraced Chinese companies seeking to dramatically expand their presence in the country.
After spending billions of dollars with their Chinese counterparts to build economic ties with the United States, the Federal Reserve’s 2021 research note suggested that many underreported their imports from China to avoid tariffs imposed by Washington .
Others are encouraging their Chinese partners to set up factories in North America. In addition, programs that allow goods from many developing countries to enter the United States will be canceled (or those that are expected to expire in the coming years). what you do. The tariff exemption could leave room for China to step in as a preferred source of American goods. what you do. distributors.
Despite the limitations of Western decoupling policies, it is worth noting that China is also working towards some form of decoupling to reduce its dependence on the West. Announced in 2015, the Made in China (MIC25) initiative aims to eliminate the dependence of Chinese companies on foreign countries for critical technologies and products.
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Policies will also continue to be implemented to expand China’s domestic market to offset restrictions on foreign markets.
China’s economy continues to be characterized by strengths and weaknesses. Rising wages for Chinese workers have steadily eroded the international competitiveness of the country’s shrinking labor pool, while the ongoing housing crisis has shaken faith in China’s domestic economy. In addition, Beijing has become less liberal with capital, opting instead for outstanding loans from the BIS.
However, Chinese officials and companies are increasingly lobbying local governments with “small but beautiful projects” that eliminate the need to consult with more dubious state leaders. China also remains critical in sectors such as rare earth minerals and expanding its role in high-end products from aerospace to green technology to compete with Western high-tech companies.
China’s efforts to adapt Chinese supply chains in Latin America and Southeast Asia have led to selling to those markets as well.
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Although it may appear that we have “already reached or surpassed China’s largest share of global manufacturing,” no other country rivals or competes with China’s manufacturing capacity and export networks. Moreover, neither China nor the West is able or willing to break their economic ties.
Even amid the collapse of Western-Russian relations by 2022, Russian energy continued to flow to Western countries, Western technology entered Russia, and Western companies announced they were leaving Russia they remained.
The massive disruptions required for China’s true economic decoupling are intolerable for both the public and private sectors. This fact is reflected in the changing language of the United States. what you do. and the EU
Chinese and Western companies instead want to continue to circumvent restrictions and do business, reflecting the resilience of China’s manufacturing sector and making it clear that the U.S.
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John P Ruehl is an Australian-American journalist based in Washington, DC. He is the co-editor of Strategic Policy and a contributor to several other foreign policy publications. His book Budget Superpower: How Russia Challenges the West with an Economy Smaller than Texas was published in December 2022. With major players such as HP, Buggati, Adidas and BMW entering the additive manufacturing arena, the stakeholders are convinced that 3D printing will revolutionize the manufacturing industry.
3D printing technology has gone through a cycle of testing, innovation and application. These developments have gained attention as the next big thing in the manufacturing industry. The 3D printing market is expected to grow at an annual growth rate between 18.2% and 27.2%, with a compound annual growth rate (CAGR) of 23.5% on average. These figures represent a growth rate of three times the size of the industry in just 3 years.
The technology has attracted different categories of end users, such as start-ups, small or medium enterprises (SMEs) and hobbyists. The feedback from the end users has an important influence on the changing trends, and not only the technology, but also the materials used are constantly improved so that the quality is not compromised. in order