Reshoring naysayers believe China is still the place to be.
Yes, most US-owned and other foreign-invested factories are still in China. This is despite all the press that reshoring, often described as moving back production to the US, has been getting.
For many companies, three factors stand out as their reasons for staying: strong vendor base, excellent infrastructure and skilled labor pool.
These advantages are not lost even to suppliers of high-value products such as consumer electronics, automotive parts, construction equipment and appliances, segments said to be the most ideal "reshorers."
Founded in California's Silicon Valley, Flextronics is among the makers listing these factors as China’s strengths. The electronics OEM provider’s headquarters are in Singapore. It was established in 1969.
Manufacturers agree that it is difficult to replicate China’s supply chain, with every material or component vendor within proximity of the assembly or manufacturing facility. This easy accessibility to inputs and consequent costs savings are particularly critical now, what with makers being pressured by narrowing margins and price competition.
An interviewee commented that margins are currently very tight. Companies would not be able to compete without minimizing costs as much as possible and China is at present the only option to get this done.
"I just do not see how Apple and GE could stay cost competitive if they moved production away from China," an executive from the mobile electronics industry said in an e-mail. "Apple and GE may be making more of a PR move than an actual large-scale production shift back to the US."
The American Global Health Group has three aloe plantations in Guangdong and Hainan provinces, covering about 500 acres altogether. "This setup makes materials procurement convenient," said Ms. Ma, a merchandiser for the company. "American Global will not simply reshore and abandon its long-term investment."
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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