Many US firms in China eyeing relocation

Considering such move as trade war bites into their profits

SHENZHEN: More than 70% of US firms operating in southern China are considering delaying further investment there and moving some or all of their manufacturing to other countries as the trade war bites into profits, a business survey showed on Monday.

US companies operating in China believe they are suffering more from the trade dispute than firms from other countries, according to the poll by the American Chamber of Commerce in South China, which surveyed 219 companies, one-third from the manufacturing sector.

Sixty-four per cent of the companies said they were considering relocating production lines to outside of China, but only 1% said they had any plans to establish manufacturing bases in North America. “While more than 70% of the US companies are considering delaying or cancelling investment in China and relocation of some or all manufacturing out of China, only half of their Chinese counterparts share the same consideration,” the AmCham report said.



The trade war is shifting both supply chains and industrial clusters, mostly towards Southeast Asia, the survey found. US companies reported facing increased competition from rivals in Vietnam, Germany and Japan, while Chinese companies said they were facing growing competition from Vietnam, India, the United States and South Korea.



Customers are slowing down orders or not placing them at all, Harley Seyedin, President of AmCham South China, said. “It could very well be that people are holding back on placing orders until times are more certain,” he said.

Published in The Express Tribune, October 30^th, 2018.

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