Top Reasons Why Companies Are Moving Out Of China And Going Toward Mexico, the US, Or Canada (nearshoring)
China has been known as a manufacturing powerhouse for many years, but as the cost of labor and other resources continues to rise, more and more companies are moving their operations elsewhere. While the reasons vary mostly from company to company, there are some general trends that we’ve noticed.
Manufacturing in China and Mexico is a very hot topic these days. In this post, we’ll explore the top reasons why companies are moving out of China.
Trade War Between China And The US
Over the last few years, some reports of companies moving out of China have been on the rise. Since the US-China trade war began, a number of companies have announced they are moving their operations out of China. This is due to the uncertain future and increased costs associated with doing business in China. The tariffs on Chinese goods have made it difficult for businesses to do business in China, and many companies have decided to move their operations elsewhere.
As the trade war continues between the US and China wages on, companies are moving their factories out of China and setting up in other countries. As the tariffs increase and the restrictions get tighter, more and more businesses are looking to leave China. The US, Canada, and Mexico are seeing an influx of these factories as companies look for alternative locations to avoid the tariffs as the US imposed a 25% Tariff on China.
Disruption In Supply Chain
The Chinese business landscape is rapidly changing as companies begin to move out of China for a number of reasons. The country’s supply chain disruption has made it increasingly difficult to get goods into and out of the country, which in turn has caused a rise in shipping costs and lowered margins.
There are a large number of countries that rely heavily on China for their supply of goods and services. Due to the recent lockdown in China to control the Covid-19 pandemic, different products from these various markets have been wiped out completely. So this has made other countries think and change their mind about dependency on one country for goods.
Concern About Chinese Product Quality
There are various reasons why companies might choose to leave China. In some cases, companies may be concerned about the production quality of their products and may feel that they are unable to compete with the quality of products being produced in ChinaChinese manufacturers have been caught falsifying ingredients and other products on numerous occasions, which has caused a lot of companies to rethink their decision to manufacture in China for their product development.
For Better Opportunities
Although the process of moving a company can be difficult, there are a number of reasons why moving can be a great choice for businesses. By expanding to new markets like Canada, the US, and Mexico, companies can gain access to new customers and resources that can help them grow. Many procurement companies are included in this.
Increase In Labour Cost
As labor costs rise in China, an increasing number of companies are moving their operations elsewhere. A recent study found that the cost of labor in China has increased by 15% in the past year, while it has remained stable in other countries. This has led to a number of companies relocating their factories to countries such as Mexico, the US, and Canada. At the same time, these countries offer lower labor costs.
China Aggressive Nature
China has had a history of conflict with other nations over trade, but recently China had some conflict with Vietnam regarding the South China Sea. It’s very important to them because 30% of their companies’ total trade travels through this region. The growth of the military in China has been a concern for the United States,
As tensions between China and other world powers continue to escalate, an increasing number of companies are moving their operations away from mainland China. Canada, the US, and Mexico have all become popular destinations for businesses seeking to flee China’s military aggression.
Choose Us For Strategic Sourcing In Manufacturing In China, the US, Mexico, And Canada
One option that is often overlooked is strategic sourcing in manufacturing. This approach involves working with a partner who can help you find qualified manufacturers in China, US, Mexico & Canada and manage the entire production process from start to finish. By doing this, you can avoid some of the potential pitfalls of working with individual manufacturers and ensure that your products are made to spec and on time. If you need sourcing from Canada or sourcing from the US, you can contact us.
As the world’s economy becomes increasingly globalized, businesses are looking for new and innovative ways to reduce costs and increase profits. One of the perfect ways to do this is by strategically sourcing manufacturing in different parts of the world. If you’re just searching for a reliable and highly experienced partner to help you source manufacturing in China, the United States, Mexico, or Canada, contact us today. We have experience in helping businesses just like yours find the right supplier and negotiate the best prices.
Final Thoughts
China was one of the promising and profitable countries for companies to set up their manufacturing base. However, with the recent rise in wages in China and tension with the US, there are many companies that are looking to move out of the country.
We are experts in Rotomolding (Rotational Molding), Injection Molding, Sheet Metal Fabrication, Urethane Casting, Rapid Prototyping, and CNC Machining.
We can provide you with a wide selection of quality products at competitive prices. WE are able to provide the best possible service for our clients in Tijuana, Mexicali, San Diego, Los Angeles, Mexico, Canada, the United States (US), or wherever they are since we deliver globally. Our experienced team is able to work with you to create a customized solution for your manufacturing needs. For more interesting blogs, keep visiting our website.
We are experts in Rotomolding (Rotational Molding), Injection Molding, Sheet Metal Fabrication, Urethane Casting, Rapid Prototyping, and CNC Machining.
We can provide you with a wide selection of quality products at competitive prices. Brecher Manufacturing is able to provide the best possible service for our clients in Tijuana, Mexicali, San Diego, Los Angeles, Mexico, Canada, the United States (US), or wherever they are since we deliver globally. Our experienced team is able to work with you to create a customized solution for your manufacturing needs.
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