WHAT IS CHINA PLUS 1 STRATEGY ?

Video Description:

This can potentially make China bleed and create BIG business opportunities for Many Asian Countries. A Policy that Many top global Corporates are gradually adopting…. Did you guess it right, Yes I’m talking about China Plus 1 Strategy? 

 

What is CHINA PLUS 1?

 

Since 1978 China has become the global Manufacturing hub because of its Cheap labor, Natural resources, Low taxes, and loose environmental laws. Over years China took drastic actions to mould itself to become a Global Manufacturing hub. They offered what was needed by most. 

 

Now things are changing and these companies who had been dependent on Chinese soil want to de-risk and diversify their dependence on one country. 

 

And the Key Reason behind it are: 

1. The Chinese economy is mature now and China doesn't enjoy the same environment that it had earlier. Wages have outgrown and tax privileges for western countries have shrunk. 

2. Now Companies operating in China face Tight Environment Laws and threats to the safety of Intellectual property.

3. Geopolitical risk and Trade war further complicate the situation for Western countries and investors want to diversify out.

4. the Last nail in the coffin was COVID and the way China dealt with it. The World Knows about it and is wary of solely depending 

 on China’s Whims and fancies.

 

Intel adopted this strategy way back in 2010, It opened a $ 1 Billion Chip plant in Vietnam to diversify out from China as it became expensive to do business in China. 

 

So if China loses then who will Gain? it depends on various factors who offers the best deal on - Labour cost, infrastructure, country policies & risk associated, and much more. Nevertheless, the top contenders will be the Likes of India, Myanmar, Indonesia, and Thailand. These ASEAN countries have a Free Trade Agreement with richer nations like Japan, South Korea, and Australia. This would bring them to the forefront and make doing business easier.

 

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