Yes, manufacturing is moving away from China in a trend known as "China+1" or diversification, driven by rising costs, US-China trade tensions, supply chain risks, and a desire for resilience, with companies shifting production to Vietnam, India, Mexico, and Southeast Asia, though China remains a massive manufacturing hub.
Trump's trade war shift away from Chinese manufacturing has reached tipping point. The proportion of supplier volume from manufacturing in China, Hong Kong, and Korea has declined from 90% to 50% over the past decade, according to Wells Fargo data.
Vietnam. Vietnam has become particularly attractive as a manufacturing hub for many of the same reasons as China did decades ago. The country has strong English proficiency and low labor costs even when compared to its neighbors.
Correspondingly, the share of manufacturing declined from 29.3 per cent in 2017 to 24.9 per cent in 2024. In this sense, China's manufacturing share exhibits an inverted-U pattern of “rising first, then declining,” broadly in line with the theoretical and empirical regularities of industrialisation.
Competitive labor costs: Countries such as Thailand and Vietnam can offer lower labor costs and sufficient labor resources compared to China, making them attractive for manufacturing operations that rely on labor-intensive processes.
Yes, China has one of the world's highest homeownership rates, often cited as around 90% or even higher (87% urban, 96% rural), driven by post-1998 housing reforms that privatized public housing and strong cultural emphasis on property as stability and a prerequisite for marriage. However, this figure can be misleading; it primarily counts those with urban household registration (hukou), often excluding many migrant workers, and while ownership is high, many face significant mortgage burdens, and the land itself remains state-owned.
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Major manufacturing nations
According to the United Nations Industrial Development Organization (UNIDO), China is the manufacturer with the highest output worldwide in 2023, producing 28.7% of the total global manufacturing output, followed by the United States of America, Germany, Japan, and India.
China's "0.1% rule" refers to its 2025 export controls that require licenses for products containing 0.1% or more (by value) of certain Chinese-origin rare earth elements or technologies, extending China's regulatory reach globally to materials like magnets, semiconductors, and defense components, even if manufactured outside China. This extraterritorial control, similar to the U.S. Foreign Direct Product Rule, aims to leverage China's dominance in rare earth supply chains for strategic influence, impacting high-tech industries by requiring approval for exports and potentially disrupting global supply chains.
In 2021, China's GDP reached around $17 trillion, making it the second-largest economy in the world after the United States. According to a report by PwC, China is expected to become the largest economy in the world by 2030, with a projected GDP exceeding $26 trillion.
- Why do U.S. manufacturers rely so heavily on China for production? U.S. manufacturers rely on China primarily because of its low-cost labor, advanced manufacturing infrastructure, and efficient supply chains. These factors make it difficult for companies to produce goods at the same cost and scale in other countries.
Whether China could defeat the U.S. Navy is a complex, debated question, with some analyses suggesting China's large fleet and advanced anti-ship missiles pose a serious threat, especially in regional conflicts near its shores, while others emphasize the U.S.'s technological edge, nuclear submarines, and global power projection, indicating a potential U.S. victory but acknowledging China's growing capabilities and potential to inflict significant damage, making a decisive outcome highly dependent on the specific scenario and location of the conflict.
China's recent economic development is clearly a catalyst for emigration. China's transition to a market economy dictates that both capital and labor have to be mobile. Economic opportunities ultimately generate demand for workers and labor force must be mobile to take these opportunities abroad.
India offers a young, abundant workforce at lower labor costs than China — alongside a rapidly growing domestic smartphone market. This makes it attractive both as a manufacturing base and an end market. According to Bloomberg, Apple plans to produce 25% of all iPhones in India by 2025 — up from just 5-7% in 2022.
China owns approximately $859.4 billion in U.S. debt, about 2.6% of the total U.S. debt. Japan surpasses China as the top foreign holder of U.S. debt, with $1.1 trillion.
China's "3-hour rule" for minors restricts children under 18 to playing online video games for only three hours per week, specifically from 8 PM to 9 PM on Fridays, Saturdays, Sundays, and public holidays, to combat gaming addiction and improve health. Implemented by the National Press and Publication Administration (NPPA) in 2021, the rule mandates gaming companies use real-name verification and facial recognition to enforce limits, though some children bypass it using adult accounts.
In China, the situation is even more pressing. Its one-child policy left it with over 30 million more men than women. These men confront a smaller dating pool, and it's even harder for working-class and rural men to find a partner.
Google has a difficult history in China. The company pulled its search engine out of China in 2010 because of government censorship and what the company said was a cyberattack from Chinese hackers trying to gain access to human rights activists' email accounts.
China's transition is opening space for other countries to move into low-cost manufacturing, where China until recently dominated. Deloitte predicts that the economies of Malaysia, India, Thailand, Indonesia, and Vietnam, the “Mighty Five” or MITI-V, will inherit China's crown for such products.
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Vietnam as a 'tiger economy'
Vietnam has a goal of becoming rich by 2045. It aims to become Asia's next “tiger economy,” following export powerhouses like South Korea and Taiwan by shifting from low-cost assembly work to manufacture higher-value products like electronics and clean energy equipment.
As a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th) The US could be down to third place in the global GDP rankings while the EU27's share of world GDP could fall below 10% by 2050.
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