{"id":223403,"date":"2023-01-21T20:03:09","date_gmt":"2023-01-21T14:33:09","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=223403"},"modified":"2023-02-20T18:50:23","modified_gmt":"2023-02-20T13:20:23","slug":"chexit-in-parts-reshoring-friend-shoring-and-billions-of-dollars-in-sops","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/chexit-in-parts-reshoring-friend-shoring-and-billions-of-dollars-in-sops\/","title":{"rendered":"Chexit, in parts: Reshoring, friend-shoring and billions of dollars in sops"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cChexit, in parts: Reshoring, friend-shoring and billions of dollars in sops\u201d <\/strong>published in the Business Standard <\/strong>on 21th January 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Economy<\/p>\n

Relevance<\/strong>– Issues related to global economy<\/p>\n

News<\/strong>– The article explains the shift of numerous factories and supply-chain dependence away from China.<\/p>\n

China is facing weakening growth<\/strong>, following a decade-long, progressive slowdown<\/strong><\/p>\n

What are the steps taken by East Asian countries to relocate their business away from China?<\/strong><\/h2>\n

Japan is paying its firms to move their factories from China. It has also introduced a new economic security law<\/strong> covering 14 sectors deemed to be part of societal infrastructure<\/strong>.<\/p>\n

South Korea and Taiwan have comparable programmes<\/strong> that target mainly China.<\/p>\n

So, Asia\u2019s three most industrialised countries<\/strong> are offering incentives <\/strong>to move their companies out of China and back to their home base.<\/p>\n

What are the recent examples of companies relocating their business away from China?<\/strong><\/h2>\n

Some 250 Japanese companies<\/strong> are reported to have left China in recent years. The trend is accelerating. It is not limited to Japanese companies.<\/p>\n

According to one report, 135 companies moved out of China just last year and relocated plants making semiconductors, motor vehicles, appliances, and clothing. Sony<\/strong> has partly re-located its smartphone production to Thailand.<\/p>\n

South Korean companies<\/strong> too have been not just re-shoring but \u201cfriend-shoring\u201d<\/strong> as well. Samsung<\/strong> has opted for Vietnam. Malaysia<\/strong> has benefited from 32 projects relocated from China.<\/p>\n

What is the reason behind relocating firms from China?<\/strong><\/h2>\n

China’s aggressive behaviour<\/strong> is compelling the firms to look for alternate options. A visa ban <\/strong>has hit both Japan and South Korea. South Korea\u2019s Lotte retail chain, Sweden\u2019s Ericsson, and Australian wine-makers have been impacted by Chinese policies.<\/p>\n

Global firms see heightened political risk<\/strong>. They are worried about discrimination, rising production costs, stricter environmental rules, and of course disrupted supplies<\/strong>.<\/p>\n

Are global firms abandoning China as a production base or as a market?<\/strong><\/h2>\n

Foreign direct investment into China actually increased<\/strong> in 2022. Germany\u2019s BASF, for instance, is relocating into China.<\/p>\n

The Financial Times report <\/strong>shows how interlocked the Apple production network <\/strong>is with the Chinese ecosystem. Countries like the US and India that have tried to restrict imports from China have only seen their China trade deficits grow.<\/p>\n

What is the scenario of India?<\/strong><\/h2>\n

India\u2019s current policy thrust like production-linked incentives, capital subsidies<\/strong> is very much in line with the East Asian.<\/p>\n

India ranked seventh on a 2021 UN list for foreign investment<\/strong>. But, it is not the default alternative to China for most global companies.<\/p>\n

India must integrate more with East Asia<\/strong> by getting into regional trade arrangements,<\/strong> lowering its tariff walls, <\/strong>and improving the quality of its workforce<\/strong>.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cChexit, in parts: Reshoring, friend-shoring and billions of dollars in sops\u201d published in the Business Standard on 21th January 2023. Syllabus: GS3- Economy Relevance– Issues related to global economy News– The article explains the shift of numerous factories and supply-chain dependence away from China. China is facing… Continue reading Chexit, in parts: Reshoring, friend-shoring and billions of dollars in sops<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-223403","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=223403"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223403\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=223403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=223403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=223403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}