Abstract
Over the past twenty years, a growing number of manufacturing firms have left China. This paper explains the three principal reasons behind this exodus: disadvantages of Chinese manufacturing, US-China trade-war tariffs, and manufacturers’ emphasis on diversification. This study analyzes the current trend with an economic model to examine the relationship between manufacturing firms and the Southeast Asian host countries. As foreign direct investment (FDI) tends to shift from higher to lower-cost regions, manufacturing firms are now leaving China and moving into Southeast Asia. This paper also suggests the option of reshoring and manufacturers’ concerns about moving. This paper is useful for investors in the manufacturing industry.
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