The problem with Made in China
The problem with Made in China
The Economist, 13-19 January 2007, Vol. 382 No. 8511, Start page: 68, No. of pages: 2
Purpose – To investigate whether Asian countries will be able to take full advantage of the China-plus-one strategy whereby foreign companies locate in China and another Asian country. Design/methodology/approach –Describes how companies are increasingly locating their factories in Asian countries, such as Indonesia, India, Taiwan and South Korean, in preference over China; presents corporate examples and provides a graph showing the share of world output in a number of Asian countries. Outlines how rising costs, and increasing risks, are deterring many companies from setting up their factories in China; identifies a number of other reasons and reports how foreign companies are adopted a China-plus-one strategy as well as locating their factories away from the main Chinese cities, inland, to take advantage of the still cheap labour supply; illustrates with the corporate example of Intel. Looks at whether the rise of a vibrant middle class in China may lure some companies back,attracted by the growing consumer market and highlights how while India is becoming an increasingly attractive option, it also poses major challenges. Originality/value – Examines the reasons why foreign companies prefer to locate in a number of other Asian countries, rather than China.
Keywords: Asia, China, Corporate strategy, Direct investment,International trade, Manufacturing
