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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 rat
by 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 agoThat 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 agoBut having factories split across 25 countries would be a logistics nightmare, wouldn't it?
- spectramax 7y agoIt 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.