Inside Out | Will Chinese firms move to Asia to dodge US tariffs? Here are two reasons why that’s ‘fake news’
Global manufacturers locate in China not just for the low wages, but for access to the nation’s workforce, infrastructure and gigantic market size
One of the most common backstories of the US trade war launched against China in the past month has been the suggestion that manufacturers currently exporting from the Chinese mainland may be forced to shift production to other parts of Asia – or, if Donald Trump has his way, back to the US.
Except it’s not going to happen.
Of course, any persistent editor will be able to track down an anecdote or two about companies shifting some production to Cambodia or Bangladesh.
I personally recall pressure from my editors in London to provide such anecdotes, intended to give substance to the story about foreign companies struggling with rising China production costs, or wrestling with tariff restraints or multi-fibre agreement quotas.
Even today, it still seems common journalistic practise to begin with the conclusion you want, and then seek out an anecdote or two to prove the point. Whatever the wider truth, all you need is an anecdote or two, and you have your story.
So it is with the claim that manufacturers will move to other countries in Asia to duck and weave around US trade war tariffs. There are at least two clear-as-day reasons why such stories are false.