Global tech giants like Amazon and Google are evaluating plans to shift their production out of China. That would be a massive blow to Chinese economy.
Are numerous global tech companies looking to shift substantial production capacities out of China? According to the japanese newspaper Nikkei Microsoft, Amazon, Google, Sony, Nintendo, HP and Dell are all working up plans to reduce their production in China and shift it to other countries in southeast Asia. This could undermine the country’s position as the „world’s powerhouse for tech gadgets“, as Nikkei puts it.
HP and Dell for example command 40 percent of the global market for personal computers. Several sources told Nikkei that they are planning to reallocate up to 30 percent of their notebook production out of China. Microsoft, Google Amazon, Sony and Nintendo are looking to move game console and smart speaker manufacturing. Amazon and Nintendo are eyeing Vietnam while Microsoft may look at Thailand as well as Indonesia. Other companies with plans to leave are Lenovo, Acer and Asus.
Massive Blow To China’s Economy
These plans – if they are in fact true – come at a time where the trade conflict between the USA and China seemed to calm a little, after Trump met with Xi Jinping and lifted the ban for Huawei. The conflict is expected to heat again if big companies should really leave China. But the move is not surprising: Costs in China are rising, a couple of manufacturers already examined alternatives in the past.
Apple for example may move up to 30 percent of ist smartphone production out of China. Right now the company is exploring the cost implications. China’s economy would suffer a great deal if manufacturers were to move their production capacities. It is the world’s biggest producer of smartphones and PCs. Electronics has been one of the keys fort he Chinese economic growth in the past decades.