Thursday, January 14, 2021

Is This The End Of Made In China?

Enrique Dans 

In early July, an important announcement by Apple went relatively unnoticed: it was shifting assembly of its iPhone 11, then the most advanced model in its product line, from China to Chennai in India. 

A couple of weeks later, Samsung, along with several other Apple suppliers (Foxconn, Pegatron and Wistron), Indian manufacturers Micromax and Lava, and up to 18 other companies applied for an Indian government incentive program for the large-scale manufacture of electronic products, that would see a significant part of these companies’ manufacturing transferred to the subcontinent. 

On the one hand this will allow them to avoid the 20% levy that India, one of the world’s most important markets in quantitative terms, imposes on imported electronics, within its increasingly protective trade policy. Perhaps more importantly, it reflects deeper macroeconomic issues to do with China’s higher costs, as well as the mechanization of production, which means less dependence on labor. 

At the same time, the Biden administration is expected to keep up pressure on China, and will exhort its allies to do the same, in a bid to force Beijing to open up the country to competition and hopefully to respect its citizens’ human rights. 

Likewise, the transfer of some of Apple’s assembly to Vietnam has helped the local economy of China’s neighbor. 

Are we witnessing a change in the economic cycle? In the latter half of the last century, China set out to create a scenario in which Made in China would be replaced by Engineered in China: the country would no longer be the world’s factory, a cheap place for the world to outsource manufacturing, and instead an advanced source of technology. At the same time, Chinese companies have increased automation, causing some of them to send up to 80% of their workers home and switch to using robots instead. The higher level of specialization of the production line workers — typically experts in machine maintenance, machine learning — generates higher wages, while mechanized factories with higher output fewer errors and accidents also means that wage costs are no longer such an important. 

In the consumer electronics industry, staying on Chinese soil still has its advantages, mainly in terms of maintaining proximity to suppliers. But increasingly, these companies are becoming global and can consider offering services and solving problems almost anywhere in the world, which could lead to pressure to progressively relocate production. 

With labor costs no longer an issue, more mechanization and a tendency to relocate production, could the future see Western companies putting more pressure on China to avoid possible sanctions and blockades at home and to try to bring value closer to the countries that design or consume their goods? And if so, within what timeframe? 

Tuesday, January 12, 2021

生產基地大遷徙 中國世界工廠時代已結束


一名工人在印度諾伊達的拉瓦工廠裝配智慧手機。 (彭博) 




企業去全球化 接近市場在地布局 


這份報告分析13種產業的325家公司,凸顯了武肺危機迫使企業重新思考全球經濟依賴即時供應鏈的程度。MGI合夥人隆德(Susan Lund)表示,新冠病毒疫情可謂「所有供應鏈衝擊之母」,若出現模擬的供應中斷衝擊到企業營運的最嚴重情境,可能造成全球逾5兆美元的經濟損失。 



報告說,在成本考量與及政府要求企業更能自給自足的壓力下,可能迫使製藥及服飾業把半數以上的生產轉移到新的國家;例如,紡織 、服飾與家具等勞力密集產業,有充分理由把生產從中國移往孟加拉、越南、印度或是衣索匹亞等國家。不過,根據MGI合夥人隆德,半導體等高科技領域則和製造業生產基地遷移趨勢相反,更聚焦在台灣、南韓既有產業聚落,主因涉及資本投資規模龐大、巨大的規模經濟,以及高度專業化。 

印度製造 吸引手機品牌設廠