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If China no longer wants to be the world’s factory, who will take its place?
- simonblack 6y agoAs the cost of labor rises, a country will lose its competitive edge. (US in the 1970s, Japan in the 1990s, China in the 2020s) Then another country with cheaper labor will take over the 'low-cost manufacturer' position for low-cost items. (Japan in the 1960s, China in the 1990s) Meanwhile the first country will move up the value-item ladder, maker of more specific, high-technology, high-value stuff. (US: space technology, computers. Japan: Hi-tech cameras, TVs, phones, etc) China was the lo-tech, low-cost manufacturer in the 1990s, by the 2000s it was starting to move up the to the hi-tech level manufacturing. (Laptops, iphones, etc) China in the late 2010s, early 2020s is moving higher up the tech scale, making its own phones (Huawei), space-vehicles (retrieving soil samples from the moon), quantum tech. It won't be the world's factory for a lot longer. When the US was the world's factory from about 1940 to about 1970, that lasted about 30 years. When Japan was the world's factory, that lasted from 1960 to about 1990, also about 30 years. China was the world's factory starting in about 1990, so 30 years brings us to the present 2020. Vietnam is looking like it will be the next factory, but it's really too small. India could be the next world's factory, but it would need too much social adjustment to do that now. Perhaps in 30 years time, around 2050, definitely India. Now I'm going to go out on a limb here. We are looking for a largish in terms of population, fairly homogenous in terms of its ethnicity, low-wage country with access to several sea-ports. I'm going to pick a couple of countries that would match these criteria: Nigeria and/or Indonesia.