Where Companies Are Going After They Leave China

Following economic reforms that provided tax breaks, subsidies, and other incentives and thereby opened China's proverbial doors to foreign investment, China swiftly became the world's most popular manufacturing hub. Low labor costs and a robust infrastructure, including roads, ports, and airports that make it easy to transport goods in and out of China, and a strong technology sector that placed Chinese companies at the forefront of developing new manufacturing technologies have since helped China maintain its first-place ranking.

China is, indeed, a mighty competitor. However, escalating trade tensions, geopolitical uncertainty, and rising labor and production costs have been the impetus for change, forcing companies to mitigate their risks by diversifying their supply chains, and the trend is gaining momentum. Citing Beijing's National Bureau of Statistics, Forbes states that foreign companies pulled $160 billion of earningsout of China during the 18 months through September 2023 (the most recent month for which data was available). Dell, for one, has announced that it will be moving some manufacturing away from China to Mexico and Vietnam.

So where else are these companies going and why? Let's take a look.

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