Manufacturing Hub: If Not China, Then Who? 7 Points

Delhi

🌏 The New Asian Tigers: How India, Vietnam & Thailand Compete for China’s Manufacturing Throne

1. China Losing Its Manufacturing Edge

• Rising labour costs and an ageing population have made China an expensive hub for global manufacturing.

• US–China trade wars and Donald Trump’s tariffs only accelerated the urgency for companies to diversify supply chains.

2. Supply Chain Diversification Becomes Mandatory

• Experts emphasize that diversification is no longer a contingency plan—it’s now a global necessity.

• With US interest rate cuts and a weaker dollar, investors are increasingly looking at emerging Asian markets for manufacturing opportunities.

3. India’s “Made in India” Transformation

• Once known mainly as a services powerhouse, India is undergoing a structural shift towards manufacturing.

• Government initiatives include:

  1. Massive infrastructure push – roads, highways, railways.

  2. Subsidies and incentives for global manufacturers.

  3. iPhone and electronics assembly already shifting to India.

• India benefits from:

  • A huge domestic market.

  • A young, skilled workforce entering job markets.

  • Its ambition to lead Globalisation 3.0 in exports.

4. Thailand – Stable Hub for High-Tech Manufacturing

• Despite political turbulence, Thailand is seen as a stable investment destination.

• Key strengths:

  • Long-standing base for automotive parts and hard disk drives.

  • The Eastern Economic Corridor (EEC) attracting EV manufacturing and data centres.

  • Strong tax incentives and government-backed policies for foreign investors.

5. Vietnam – Electronics Rising Star

• Vietnam was an early beneficiary of supply chain shifts from China.

• Key highlights:

  • Traditionally strong in textiles manufacturing.

  • Rapidly expanding electronics sector – Samsung, Japanese firms already producing there.

  • Competitive tariff advantages with the US strengthen Vietnam’s export power.

6. Indonesia – Beyond Resources

• Indonesia is pivoting from a resource-driven economy (coal, nickel, palm oil) to industrialization.

• Government push includes:

  • On-shore processing plants with subsidies.

  • Job creation for its growing young population.

  • Policies encouraging foreign investment in multiple industries.

7. The Bigger Picture – Asia’s Growth Outlook

• Despite concerns over China’s slowdown, Asia’s earnings growth is projected at 11–12%.

• India still maintains 6%+ GDP growth, among the highest globally.

• Tariff rollbacks reduce fears of a global recession, making Asia an attractive investment hub once again.