Data from the World Trade Report indicate new trends in international trade • The epidemic causes more than 80% of global companies to seek supply chain alternatives from China
Foreign exchange // Illustration photo: IPP
The global economy is changing because of the Corona. The big loser is China and the beneficiaries are Southeast Asian countries, the US and Canada - the Bank of America Securities World Trade Report findings show.
The study, conducted by analysts surveying more than 3,000 companies worldwide, shows that more than 80% of companies, with a total market value of $ 22 trillion, own or plan to implement and copy their supply chains from China and other countries.
"There is a trend of a prolonged cessation of globalization," the Bank of America macroeconomists say, "the world is entering an unprecedented level, which is difficult to estimate in terms of scale, during which supply chains reach home, approach consumers or are directed to strategic allies."
China, currently responsible for one-quarter of the global industry's value added, has been at the center of US trade policy, to which may be added other factors that reduce China's attractiveness - including increases in wages, stringent environmental norms, complex regulatory frameworks and government focus to become a high-level economy oriented Services At present, labor costs in China relative to productivity are double that of other Asian countries, and even more than in Singapore.
Southeast Asia and India will be the biggest beneficiaries of China's partial departure. At the same time, about half of all global North American sectors have announced plans to return to their original locations in the US and Canada. The biggest changes are being made by companies in the manufacturing, retail, hardware technology and semiconductor sectors.
Nike, for example, has been able to use automation over the past ten years to double its revenue, reducing work by 20%. Nike's major manufacturing partners plan to double production capacity in the next ten years, reducing direct labor needs by about 50%.
At Apple, the study foresees continued automation of existing supply chains, transferring any non-iPhone device production to other countries or back to the source, and positioning the production lines for final assembly of the products in their target markets.
"The practical process is still moderate, and it seems that many companies are trying out China Plus' strategy, where they usually maintain existing supply chains, while running lecture programs in alternate locations," Bank of America says. Or the failure of these run programs, and they will help determine the speed of future change. "