China’s role in global manufacturing under pressure as more European firms look to Vietnam and India, surveys show
- A growing number of foreign firms are considering alternatives for production and manufacturing after China’s zero-Covid restrictions, two new surveys show
- Alain Cany, chairman of the European Chamber of Commerce in Vietnam, says European investors want more stable business and investment conditions
More foreign firms have begun or are considering relocating part of their operation from China to neighbouring countries such as Vietnam and India, according to two recent surveys, in the latest indication of how Beijing’s hardline zero-Covid policy has damaged the country’s reputation in the global supply chain.
The share of European companies that have relocated some of their operations from China to Vietnam rose to 41 per cent in the last quarter of 2022, up from 13 per cent in the third quarter, the European Chamber of Commerce in Vietnam said.
The chamber’s survey, which was released on Thursday, polled more than 200 European companies and found the share that had not shifted part of their operations from the world’s No 2 economy to Vietnam had dropped from 76 per cent to 31 per cent over the same period.
Alain Cany, the chairman of the European Chamber of Commerce in Vietnam, said that European investors in China clearly sought more stable business and investment conditions in the fourth quarter of 2022.
The ongoing effort to diversify sourcing and not become totally dependent on one country has motivated European investors to invest in Vietnam
“The ongoing effort to diversify sourcing and not become totally dependent on one country has motivated European investors to invest in Vietnam, especially following the pandemic,” said Cany, who is also chairman of Jardine Matheson Vietnam.