2013-10-01 19:08:46 - Many companies are shifting their manufacturing operations to gain quick access to the ASEAN market. How will this affect the current favourite of global FDI, China?
The ASEAN region is on the radar of many companies as they consider shifting their manufacturing operations to gain quick access to the post-2015 ASEAN Economic Community market. Many US companies are also joining the scrabble. How will the burgeoning ASEAN business environment affect the current favourite of global FDI, China? Japnit Singh, Senior Director of Spire Research and Consulting, shared his insights in JETRO’s official magazine.
With more US companies entering the ASEAN market, Japanese companies are gearing up to face the fierce competition foreseen in the automotive and printing device sectors, in particular. Singh remarked that printing devices from big brands, such as Hewlett-Packard and Dell, are already available in the ASEAN market. In addition, these Japanese companies have
a strong foothold with a large market share in the Business-To-Business (B2B) printing devices.
Almost 19 percent of companies surveyed cited that they would relocate from China to ASEAN region within the next two years. Singh discussed that this emerging trend could persist if China’s labour cost continues to rise. Currently, China is enjoying trade surplus especially in the textile and garment, as well as steel mill product sectors. However, if more businesses relocate their production hubs to the ASEAN region, the equation of the trade structure in China would transform drastically.
Will China gain back its competitive edge?