Industry experts say the biggest shift in cross-border supply chains is happening now since China joined the World Trade Organisation in 2001. The shift is creating stiff competition to secure new facilities in neighbouring countries and rebuild supply chains outside of China, home to a fifth of global manufacturing.
The scramble is driven by the risk of more, and higher, US tariffs on China, and fears that nearby emerging economies can only accommodate new businesses on a “first come, first served” basis.
Vietnam and Thailand are emerging as preferred destinations, but they still face capacity constraints ranging from red-tape to skilled labour and limited infrastructure.