The View | Chinese companies are on the move – inland and to Southeast Asia
- Domestic developments such as rising wages and stricter environmental regulations in addition to geopolitical factors have pushed Chinese companies to shift their operations either within the country or overseas
- This ability to adapt quickly to changing conditions will help Chinese firms to survive a challenging environment
Inland movement has gained momentum as businesses strategically relocate to regions within China that offer economic advantages and lower operational costs. This strategic shift reflects a proactive approach to counteracting challenges and maintaining competitiveness amid a dynamic global business landscape.
To promote development of the inland provinces, the Chinese government is proactively encouraging manufacturing firms in coastal provinces to diversify and relocate or move part their production more inland. Since 2010, a series of guidelines have been issued to encourage inland transfers from the eastern coastal cities to the central and western regions. The objective is to achieve more balanced regional development, accelerate industrialisation and urbanisation in inland areas and foster economic upgrading in the eastern region.
In conjunction with the initiatives undertaken by the central government, regional authorities in inland areas have also implemented a range of policies to attract manufacturing firms to relocate in their areas. These encompass subsidies, tax incentives, streamlined approval processes, assurance of labour supply and various cost reduction measures.