— to continue even after the protectionist
President Donald Trump has left office.
Companies have reason to diversify out of China
to limit the impact of U.S. tariffs.
But leaving China can be arduous and
complicated. Over the past three decades,
global companies have come to rely on Chinese
manufacturing centers, where specialized
suppliers cluster and make it convenient for
factories to obtain parts when they need
them. China accounts for more than 80% of
smartphone and notebook production, 55%
of global exports of handsets and computers
and more than half of global TV and server
production, according to estimates by UBS.
It also accounts for 27% of global auto
production, up from 7% in 2003, according
to UBS, which said China’s share of global
exports of auto parts is about 8%, up from
1% in 2003.
“It’s all part of a big puzzle,’’ said Barbara Hoopes,
associate professor of business information
technology at Virginia Tech. “It’s more complex
than most consumers realize. You get 87 types of
toothpaste on the shelf, and you don’t think of
what it takes to get them there.’’
Without China, she said, it is “hard to imagine
how anything would get done.’’
Mike Wall, an auto industry analyst for the
research firm IHS Markit, was encouraged
that some companies are preparing to
restart production.
“It will take time to build back up,” Wall said. “As
we see these plants come back on ... that will
help, but we’re not out of the woods.’’