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Business· Manufacturing

Cross-border Chinese logistics firms are profiting from manufacturing exodus in China

CKN
minutes 2019/05/24 07:02:52
3,022
cross border logistics; manufacturing exodus; factory reocation

May 24, 2019 (China Knowledge) - Cross-border Chinese logistics firms are unexpectedly reaping benefits from the trade war as Chinese manufacturers shift their operations out of the country in order to avoid tariffs.

According to Guangzhou-based R&T Transportation, the company had helped 10 manufacturers across sectors from jewelry, electronics and printing to relocate their entire plant from China to neighboring countries since the second half of 2018, profiting handsomely from these operations.

In addition, the company has also helped more than 500 companies to transport their partial production lines, raw materials and equipment out of the country to their new plants in other countries.

Many companies are now looking to relocate these neighboring countries as the trade war escalates and logistics companies that are able to operate cross-border and capable of handling large-scale manufacturing equipment and customs clearance are standing to benefit.

However, this exodus is no new trend as companies had already started to move out of China as rising costs of labor and having to meet environmental regulations force companies to look for cheaper alternatives in other countries.

One growing trend is that new production facilities being built in neighboring Southeast Asian countries are also sometimes larger than that of the factories being left in China, resulting in manufacturing hubs and clusters being quickly formed in these areas.

As international buyers place an increasing importance in manufacturers having out-of-China facilities, this relocation trend is likely to increase in the coming years as companies look to edge out their competitors in this aspect.

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