Chinese companies moving to Vietnam keep quiet on trade war to avoid wrath of authorities and staff

Many factory owners planning to relocate outside China fear response from Chinese governments, employees, suppliers and local communities

Chinese companies also ‘afraid Vietnamese society is opposed to Chinese manufacturers moving to their country’

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People work in Wonderland nursery products company in Dongguan, Guangdong Province, China. Nursery products are excluded from US-China trade war tariffs, but many other Guangdong-based manufacturers are being forced to move to Vietnam. Photo: EPA-EFE

Published: 8:00pm, 16 May 2019Updated: 9:45pm, 16 May 2019

Chinese state media may have launched a fierce propaganda campaign, placing the blame for the trade war squarely at the feet of the US government. But many manufacturers in China are keeping their heads below the parapet, for fear of reprisals from both inside and outside the country.

Interviews reveal that many factory owners and operators feel that they are caught in the middle of forceful rhetoric from both sides in the trade war. And rather than face direct retaliation from officials, workers and suppliers in their home market, they are deciding to keep their counsel.

Those companies that plan to move production out of China to avoid US tariffs and preserve their US business face a particularly delicate balancing act.

“Manufacturing exporters that are thinking of relocating face more difficulties and higher costs than those that already moved out over the past two years, so many of them are not willing to speak out,” said Liu Kaiming, head of the Shenzhen-based Institute of Contemporary Observation, which monitors working conditions for hundreds of Chinese contract manufacturers.

Tab Welding is part of the GRST battery production line at Ebatte's GRST factory in Foshan, Guangdong, China. Photo: Xiaomei Chen

“To relocate, they have to handle very carefully the plans for lay-offs and compensation for workers, the reaction of suppliers, the problem of stock price fluctuations in large enterprises, and so on. They have to keep all this low profile,” he said.