Source:
https://scmp.com/economy/china-economy/article/3007183/chinas-belt-and-road-may-accelerate-exit-manufacturing
Economy/ China Economy

China’s belt and road may accelerate exit of manufacturing to Vietnam and India, researchers warn

  • The Belt and Road Initiative is China’s plan to grow global trade, but coupled with the US-China trade war, it could add pressure to its sluggish economy and debt pile
  • Foreign direct investment in Vietnam’s manufacturing sector, driven by electronics manufacturing, has risen to 11 per cent a year over the past five years
China is focused on upgrading itself from the “workshop for the world” to one that focuses on hi-tech manufacturing. Photo: Xinhua

The trade war with the United States coupled with the “Belt and Road Initiative” has the potential to add further pressure to China’s sluggish economy and debt pile, according to researchers, as the benefits of manufacturing in the mainland decrease.

China’s manufacturing industry has already been hit by the US trade tariffs, in particular, the smaller exporters who are the most vulnerable to slowing demand and slimmer margins in the face of competition from low-cost alternatives including Vietnam and India.