Foreign firms look to reduce reliance on China, poll shows
- Strategy known as ‘China Plus One’ sees companies boosting operations in Vietnam, India and elsewhere
- Growing trend of remote work brought on by Covid-19 pandemic has also encouraged firms to downscale offices, survey says
In the online survey conducted in December by Japanese staffing firm Pasona Group, 57 per cent of Japanese companies in Vietnam and 55 per cent in India said they would expand operations in the host countries, compared with the average of 39 per cent among all 11 countries and regions polled.
Of the 818 companies polled, 67 per cent said they planned to keep the current level of their bases and operations in the 11 economies.
With Southeast Asian countries and regions hit hard by the pandemic, 30 per cent of Japanese companies in Thailand, 28 per cent in Malaysia and 22 per cent in Hong Kong said they had downsized posted staff or planned to do so within the next three months. The average across all respondents was 16 per cent.
The growing trend of remote work brought on by the pandemic coupled with high property prices has also encouraged firms to downscale offices, with at least 15 per cent in Hong Kong, Singapore and Indonesia saying they had or planned to do so.
In a show of the China Plus One strategy, 43 per cent of respondents in Vietnam said they had expanded offices or planned to.
Seventy-four per cent of the respondents cited lack of communication between employees as an issue of concern regarding remote working, followed by 59 per cent who cited performance evaluation of staff.
The economies covered by the survey were the United States, Canada, Hong Kong, Taiwan, South Korea, Thailand, Vietnam, Malaysia, Singapore, Indonesia and India.