It was reported in the WSJ today that “China Finally Has a Rival as the World’s Factory Floor“. While some of the claims in the article are a bit ahead of themselves, I largely agree with the central message.
To be sure, China is not going away from the central stage of the world any time soon. It has built its enormous manufacturing bases over the past 40 plus years or so, and it has very deep and formidable expertise over the years. For many companies who outsourced their productions in China, it will remain there for a long time.
But, as the article mentioned, many companies are diversifying out of China with a so-called “Plus one” strategy. That plus-one is going to allow countries such as India and Vietnam to grow substantically.
At the same time, China, due to its own political stance, will continue to weaken its own manufacturing sector.
So the net result in ten years may be quite different from today. My prediction is that India and Vietnam will likely be as important as China ten years from today. With any luck, they might even surpass China to be the most important manufacturing hubs to the world.