I will agree that China will have a large advantage if there is significant domestic market for either the end product or major components.
For products like toys, where low cost labor and simple raw material are wanted, I expect that VietNam, Thailand, etc. are hungry enough.
Similar for most garment manufacturing.
For something like auto parts and sub assemblies, where you want to have some technical skill, suppliers of fabricated metal part, alloys, special plastics, and have more complicated supply chain,
China has huge advantages. Add in any sales to the domestic market, and the advantages are almost overwhelming.
I think we can think of China today as an industrial country that happens to have very low costs (for now).
Garment makers have already moved inland, towards cheaper areas. For lots of the low end stuff, like toys, I think Vietnam would work. VietNam would also be happy to have a toy plant.
If you put a toy plant in China, you would not be at the top of the list for the local governments. If HP or Airbus or Honda decides they MIGHT like your land and building for a parts plant, the local authorities will have bulldozers outside your door before noon.
Low end assembly is a stepping stone for China's industrialization, and one that has almost past. |
