China no longer ‘workshop of the world’ with US trade war accelerating manufacturing exodus, lobby group says

China’s days as the workshop of the world are numbered, with the trade war only accelerating the exodus of mass manufacturing, according to the head of a prominent US lobby group in China.

“I have said for a number of years, the days of China being the workshop for the world are over. If they’re not over, they will be over very soon,” said Harley Seyedin, president of the American Chamber of Commerce (AmCham) in South China, which represents American and international companies doing business in and around Guangdong province, China’s manufacturing heartland.

Guangdong‘s exports lead all other provinces and regions in China, accounting for 27.5 per cent of national exports in 2017, according to the Hong Kong Trade Development Council. But already there are signs that the province, also a major destination for foreign investment, is struggling to maintain growth, amid numerous headwinds.

Last year, China’s most prosperous province grew at 6.8 per cent, just below its 7 per cent growth target, as it struggled to reduce its reliance on low-end manufacturing and exports. Guangzhou and Shenzhen, the province’s capital city and technological centre, respectively, also missed their growth targets for 2018.

“Today, does it really make any sense to bring labour from all over China into Guangdong, bring fuel from all over the world to produce something for export? I don’t think it really makes a lot of sense. Because labour is expensive, the land is expensive, the model has changed. China has moved up the value chain,” said Seyedin, who has lived and worked in China for 27 years, in an interview on the sidelines of an investment conference in Xiamen.