4 ms·
No. It's not that easy to move. Factories don't work in isolation. One of the major advantages of China is that all the suppliers are located very close to each
by hangonhn 8y ago
No. It's not that easy to move. Factories don't work in isolation. One of the major advantages of China is that all the suppliers are located very close to each other so you can get very fast turn arounds. Some people have the mistaken notion that it's only because of cheaper labor, which is only partly true. But in the area where a lot of the manufacturing is happening, Shenzhen, labor cost isn't that cheap because the cost of living has skyrocketed.
This is an old but really insightful article on why manufacturing happens in China: https://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&ref=charlesduhigg&pagewanted=all https://www.nytimes.com/2012/01/22/business/apple-america-an...
It's similar to why tech startups largely start in or move to Silicon Valley. It's the ecosystem of VC, pool of talent (Stanford, Berkeley, the other UCs, and tech companies), and existing large tech companies.
This all can change but not overnight.
Wendover Productions did a nice video on manufacturing in Shenzhen: https://www.youtube.com/watch?v=E7Jfrzkmzyc https://www.youtube.com/watch?v=E7Jfrzkmzyc (Highly relevant to the big picture and issues around the tariffs)
- dv_dt 8y agoThis is similar to the the original dynamic that allowed Silicon Valley to be Silicon Valley and produce ICs, then computers, home computers and game consoles, etc.