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China is losing its place as the center of the world’s supply chains, here are 5 places supply chains are going instead.

Five Asian countries are vying to get a share of the supply chain void created by the inability of China to continue as the factory of the world. These countries that are located close to China, include India, Vietnam, Thailand, Malaysia, and Bangladesh threatening a four-decade monopoly of China in manufacturing.

India is set to surpass China in 2023 as the most populous country, the UN’s Department of Economic and Social Affairs. Apple has already moved some of its iPhone production to the Indian states of Tamil Nadu and Karnataka. The goal is to produce 1 in 4 iPhones in India by 2025. Unlike China where foreign investors operated smoothly India however, is marred by red tape and prolonged decision-making.

Vietnam followed the economic steps of fellow communist country China and the reforms yielded results. It attracted FDI worth $31.15 billion in 2021. Over 60 percent of this investment was consumed in the manufacturing-and-processing sector. The country enjoys advantages in the apparel, footwear, electronics, and electrical appliances sectors. Major apparel and footwear brands like Nike and Adidas have shifted some of their production lines to Vietnam

Thailand saw its FDI increase threefold between 2020 and 2021. It is a key auto and electronics manufacturing hub. Sony 2019 closed its Beijing smartphone plant and relocated some of the production to Thailand. Sharp also moved its printer production to Thailand because of the US-China trade war. Even Chinese companies have relocated parts of their supply chains to Thailand. Setting up manufacturing plants abroad didn’t come from opportunities, it is more of a strategy to deal with challenges to gain market access.

Bangladesh is already a beneficiary of the supply-chain shift away from China. It now wants a bigger slice of the pie. It is home to a huge garment-manufacturing sector. Even before the COVID-19 lockdowns crippled China’s manufacturing sector, Bangladesh was a rising star in the garment-manufacturing sector. Bangladesh’s rise was primarily due to rising labor costs in China. The cost difference is large — the average monthly salary of a worker in Bangladesh is $120, or less than one-fifth of the $670 a factory worker’s salary in China. The country is also the world’s second-largest garments exporter, after China.

Bangladesh is now working to attract investments beyond the garment sector into others, including pharmaceuticals and agriculture processing.

Malaysiahas attracted at least 32 projects that have relocated from China to Malaysia, the Malaysian Investment Development Authority said in July 2020. The authority didn’t provide details of the projects or of the companies that moved. Malaysia’s FDI inflows hit a five-year high of $48.1 billion in 2021, with the manufacturing of electronics and vehicles being the main contributor, according to official government information.
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