shine trader limited reports:
In the United States, the “made in China” label is everywhere. However, the risks of rising costs, trade war and epidemic have prompted some enterprises to rethink their relations with suppliers and China. “We realize that too much power has been used in one country,” said Ren tiura, head of the procurement industry group (SIG, a major global procurement industry association headquartered in the United States – editor’s note). However, the change in the U.S. supply chain is not to leave China on a large scale, but to diversify. As the epidemic continues to spread, no procurement destination can be spared. A single purchase from China is not the only risk.
After the United States imposed tariffs on Chinese products, many enterprises turned their attention to Vietnam, and some enterprises are also looking for suppliers in Bangladesh, Thailand, Indonesia and Malaysia. However, many countries in Southeast Asia lack developed transportation infrastructure and ports, which will lead to delayed delivery time and other risks. Some enterprises consider returning to the United States, but it is difficult to reverse the trend of outsourcing and “Offshoring” manufacturing to emerging markets for more than 30 years. “We no longer have the talent, expertise, assets and equipment to efficiently manufacture key components,” said a chemical manufacturer. A more common approach is offshore outsourcing to Mexico, but experts point out that outsourcing near the United States is not equivalent to obtaining supply resilience. Some procurement executives began to focus on other countries in central and South America, but most of the infrastructure in the region is limited.
The road back to China? Tiula said that by increasing suppliers in Vietnam, some members of SIG recognized themselves as diversified. In the end, they found that Vietnamese suppliers and Chinese suppliers buy raw materials and parts in the same place, “in the final analysis, almost every road leads to China”. In today’s world, it is difficult to imagine any supply chain that has nothing to do with China. For example, a 2021 study by the American fashion industry association shows that China is the most commonly used procurement destination for American fashion enterprises.
Reprint indicated source：Spark Global Limited information