China Loosing Manufacturing To Other Nations Due To Covid-0 Lockdowns

[Economy 52,845]

https://www.cnbc.com/2022/10/20/china-factory-of-the-world-is-losing-its-manufacturing-dominance.html

 

China's decline in dominance in everyday goods such as clothing, foot wear, cheap furniture and a bunch of everyday products was already a trend that had started due to rising wages in China

 

However recently the trend is accelerating and China is quickly loosing market share dominance to other Asian Countries such as Vietnam, Bangladesh, India, Malaysia, Taiwan and others

 

China's Covid-0 policy and re-occuring lockdowns is a major cited reason. Customers are beggining to get frustrated that Chinese suppliers are chronically unreliable as everytime a major Chinese city or region goes into lockdown, delays in shipments occur and they are now looking for alternatives

 

China's lockdowns is still causing pandemic related disruptions and shortages such as a chip shortage that is still affecting the car manufacturing industry around the world 

[Eido 3,681]

Can confirm I am currently designing a box for a client and this is so complicated to even get a quote 

[HermioneT 1,998]

This is a good thing! It's important to have a wider distribution of countries able to produce various goods. Global developments are getting more and more unpredictable, so it will help to lessen the impact if manufacturers in one region/country are having problems.

I work in a field where a lot of parts and stuff we need for our products can only be sourced in China which has been really detrimental within the last years as due to lockdowns and shipping delays everything got delayed. Also a lot of manufactures know their power and produce low quality because they know no-one else can do it at all (or for competitive prices). 

[nATAH 56,978]

are their covid rules super strict or are they just struggling? is the population vaccinated too?

[CannaeDrive 3,412]

About time I would say.

[RAMROD 117,041]

25 minutes ago, NATAH said:

are their covid rules super strict or are they just struggling? is the population vaccinated too?

They are very strict. When the government mandated a lock down, not one soul can be seen on the streets except for the patrolling officers.
There were video for extreme example too, where these officers actually chained and padlocked people's door to make sure they can't go out.

 

It was frustrating for the civilians too, to the point they had to use barter methods for things they need, because of shortages.

https://www.thestar.com.my/tech/tech-news/2022/04/14/locked-down-shanghai-residents-barter-for-what-money-cant-buy

 

Also, China doesn't use the mRNA vaccines or even AZ that widely use in most parts of the world. They are using their own, (Sinovac, Sinopharm, and the likes), that were also distributed in some poorer countries too,  which is only effective for the initial virus, not the Omicron ones. Hence their covid woes never resided. 

https://www.nytimes.com/2022/02/18/business/china-coronavirus-vaccines.html

[YourEvilTwin 1,384]

This is not far off their planned path. China has much bigger ambitions than remaining the world's low cost manufacturing hub, or else they wouldn't have allowed wages to rise rapidly for decades.

They let tens of million of state workers lose their jobs in the 90s in order to modernize state enterprises, and it paid off. They won't be afraid to do it again for what they call "industrial upgrading".

This is what the trade war and the chip ban are really about. It's also what led to the anti-Japanese propaganda in the US in the 80s when Japan was on its way to (partially) achieving the same.

[Economy 52,845]

1 hour ago, NATAH said:

are their covid rules super strict or are they just struggling? is the population vaccinated too?

Much of their elderly population (almost 1/3) still isn't vaccinated not sure if it's due to lack of vaccine or if it's because many are refusing

 

Also their vaccines are less effective

 

So the government has decided that for now to prevent another health emergency, anytime cases pop up in a region or city, they have to go into lockdown

 

But because omicron is so contagious, it keeps popping up over and over forcing frequent lockdowns at random parts of the country. Everytime that happens local shops and factories have to shut down

 

As a result it's making them an unreliable supplier of goods.

 

Much of the lingering pandemic supply chain disruptions that seem to be lasting forever despite reopening almost everywhere is largely because of China

[Economy 52,845]

1 minute ago, YourEvilTwin said:

This is not far off their planned path. China has much bigger ambitions than remaining the world's low cost manufacturing hub, or else they wouldn't have allowed wages to rise rapidly for decades.

They let tens of million of state workers lose their jobs in the 90s in order to modernize state enterprises, and it paid off. They won't be afraid to do it again for what they call "industrial upgrading".

This is what the trade war and the chip ban are really about. It's also what led to the anti-Japanese propaganda in the US in the 80s when Japan was on its way to (partially) achieving the same.

It's a natural consequence of a maturing industrialized economy and of course they have embraced it and not tried to stop it

 

But loosing manufacturing competitiveness due to rising incomes is one thing, there's a positive associated with it 

 

Loosing it because of lockdowns on a virus they can't control is another. I'm sure the latter wasn't part of any "plan". There's no economic benefit to it

[YourEvilTwin 1,384]

Hence I said "not far off". Obviously their last five year plan didn't account for a pandemic, but the good thing about their government structure is that they are quick to adapt.

[GipJo 2,912]

But that's what Chinese government wanted, they want to get rid of these low-end industry structures. Manpower cost is getting higher and higher there, China doesn't really want to be "the world factory" anymore, that's why western countries are transferring these industries to other countries like India and Vietnam.

[Economy 52,845]

Just now, GipJo said:

But that's what Chinese government wanted, they want to get rid of these low-end industry structures. Manpower cost is getting higher and higher there, China doesn't really want to be "the world factory" anymore, that's why western countries are transferring these industries to other countries like India and Vietnam.

Right. But they wanted to loose some of that as higher end industries replaced them. Not loose them quickly as a result of having to force shutdowns

 

They are doing this because of pandemic threat they aren't well equip for. I'm sure they don't enjoy loosing factories this way as a side effect

[Fresco 1,688]

1 hour ago, RAMROD said:

They are very strict. When the government mandated a lock down, not one soul can be seen on the streets except for the patrolling officers.
There were video for extreme example too, where these officers actually chained and padlocked people's door to make sure they can't go out.

 

 

Also, China doesn't use the mRNA vaccines or even AZ that widely use in most parts of the world. They are using their own, (Sinovac, Sinopharm, and the likes), that were also distributed in some poorer countries too,  which is only effective for the initial virus, not the Omicron ones. 

😱 A horror story with the bolted doors. They need better vaccines. 

And there are new variants all the time now.  Going to be hard for even mrna and pfe to keep up.

 

[GipJo 2,912]

1 minute ago, Economy said:

Right. But they wanted to loose some of that as higher end industries replaced them. Not loose them quickly as a result of having to force shutdowns

 

They are doing this because of pandemic threat they aren't well equip for. I'm sure they don't enjoy loosing factories this way as a side effect

Of course, pandemic definitely caught them off guard and made them bleed a bit, but their infamous but stable political structures can make them survive such blow, something can't be said about a lot of countries. Look at the freak show of UK government.

[Economy 52,845]

3 minutes ago, GipJo said:

Of course, pandemic definitely caught them off guard and made them bleed a bit, but their infamous but stable political structures can make them survive such blow, something can't be said about a lot of countries. Look at the freak show of UK government.

Of course no doubt. I'm sure if this turns out to be a short term thing they will be fine

 

I just meant some ppls wording made it sound like they don't care cuz they wanted to loose these industries anyway and im like... I'm sure they care cuz loosing some business this quickly and this way is definitely not what they had in mind

 

Longer term their shriking population and rapidly ageing population if anything may be the their biggest challenge

 

Capitalism as we know it thrives on growth, loans to expand etc. When population shrinks it becomes a serious challange. Japan has been struggling with it for some time