Washington blew up in 2018. But few countries
can match its vast workforce, efficient suppliers
and brand new ports and other infrastructure.
Peter Navarro, a Trump adviser on trade, has
called for Washington to rely less on Chinese-
supplied components for medical equipment
and raw materials for pharmaceuticals.
Companies started looking for non-Chinese
suppliers and manufacturing sites last year but
there are few appealing options, said Gerry
Mattios, a Bain & Co. supply chain expert.
In addition to its workforce and rising skills,
China is a leader along with the United States in
embracing digital technology to make its supply
chains even more competitive, Mattios said.
“Right now, most people would think companies
are quickly leaving China,” he said. “The reality is,
that is very difficult.”
Companies including South Korea’s Samsung
Electronics have shifted some production
to Vietnam to cut labor costs. But Vietnam’s
population of 90 million people is smaller
than that of the single Chinese province of
Guangdong, the country’s manufacturing
heartland, which has 100 million.
Vietnam’s ports, airports and other infrastructure
are straining to keep up with growing trade.
“I think China, even after this Covid, will still have
a major competitive advantage,” said Mattios.
China’s government wants to shut down talk
about companies leaving.
“It is neither realistic nor wise to try to artificially
cut off the global industrial chain and supply
chain,” a foreign ministry spokesman, Geng
Shuang, said. “Given the current epidemic
situation, it is simply the wrong medicine.”
Image: Han Han Guan