5 ms·

Exactly, Thailand and Vietnam are already on the ramp up phase and they've gotten sophisticated enough for companies like Intel to establish a manufacturing fac

Exactly, Thailand and Vietnam are already on the ramp up phase and they've gotten sophisticated enough for companies like Intel to establish a manufacturing facility in Vietnam. Evidently, training the labor and building infrastructure is possible, albeit not as competitive as China, and it is only a matter of time for others to follow.

DiogenesKynikos 7y ago
Thailand and Vietnam are not replacements for China, though. They're simply too small. There are provinces in China with a larger population than Vietnam, and there are about 25 Chinese provinces with a larger GDP than Vietnam.
- lostapathy 7y ago
  Nothing says all this factory capacity needs to move to the same country. There would be a lot to be said for splitting these factories across 25 countries rather than settling on "the next China"
  - DiogenesKynikos 7y ago
    That would shield American companies from the geopolitical risks posed by an erratic/belligerent American government of the type currently in office, but it doesn't necessarily make sense from a purely economic point of view. There is a lot of electronics manufacturing know-how and infrastructure concentrated in China, and we all know about the theory of comparative advantage.
  - raducu 7y ago
    But having factories split across 25 countries would be a logistics nightmare, wouldn't it?
    - spectramax 7y ago
      It would be but just how a tiny country such as Switzerland can dominate the watch manufacturing industry, smaller countries can specialize in a particular industry and excel at it. China still would have a competitive advantage but as the middle class in China rises, labor is getting more expensive and asia-pacific region is ready to accelerate manufacturing capacity. If these countries play their cards right, allow seamless trade and promote a strong supply chain; they can be serious contenders.
- zhdc1 7y ago
  Thailand and Vietnam together are larger than France and Germany combined. They're not a replacement for China, obviously, but they don't have to be. A large part of China's role in global high-tech manufacturing is final assembly, which can and increasingly is being done everywhere.
  - cm2187 7y ago
    Plus if you add India and Indonesia to the mix, there is a very large pool of reasonable stable, cheap labour countries that could provide a more suitable alternative if their government apply their mind to it.
zhdc1 7y ago
Lower cost manufacturers are already migrating away from SE Asia because of rising labor costs, driven in large part by competitors expanding into the area for the local market (e.g., auto manufacturers) or moving away from China. The climb up the value ladder is very real, and it's only partially being driven by the political climate in China.

DiogenesKynikos 7y ago

Thailand and Vietnam are not replacements for China, though. They're simply too small. There are provinces in China with a larger population than Vietnam, and there are about 25 Chinese provinces with a larger GDP than Vietnam.

lostapathy 7y ago
Nothing says all this factory capacity needs to move to the same country. There would be a lot to be said for splitting these factories across 25 countries rather than settling on "the next China"
- DiogenesKynikos 7y ago
  That would shield American companies from the geopolitical risks posed by an erratic/belligerent American government of the type currently in office, but it doesn't necessarily make sense from a purely economic point of view. There is a lot of electronics manufacturing know-how and infrastructure concentrated in China, and we all know about the theory of comparative advantage.
- raducu 7y ago
  But having factories split across 25 countries would be a logistics nightmare, wouldn't it?
  - spectramax 7y ago
    It would be but just how a tiny country such as Switzerland can dominate the watch manufacturing industry, smaller countries can specialize in a particular industry and excel at it. China still would have a competitive advantage but as the middle class in China rises, labor is getting more expensive and asia-pacific region is ready to accelerate manufacturing capacity. If these countries play their cards right, allow seamless trade and promote a strong supply chain; they can be serious contenders.
zhdc1 7y ago
Thailand and Vietnam together are larger than France and Germany combined. They're not a replacement for China, obviously, but they don't have to be. A large part of China's role in global high-tech manufacturing is final assembly, which can and increasingly is being done everywhere.
- cm2187 7y ago
  Plus if you add India and Indonesia to the mix, there is a very large pool of reasonable stable, cheap labour countries that could provide a more suitable alternative if their government apply their mind to it.

zhdc1 7y ago

Lower cost manufacturers are already migrating away from SE Asia because of rising labor costs, driven in large part by competitors expanding into the area for the local market (e.g., auto manufacturers) or moving away from China. The climb up the value ladder is very real, and it's only partially being driven by the political climate in China.