Sunday, January 17, 2021

Google, Microsoft To Move Out Of China; Vietnam, Thailand Set To Benefit The Most

The coronavirus pandemic has severely disrupted global business chains. Many companies and even some countries are now deciding to pull out from China and look for economic avenues elsewhere. Samsung, for instance, has decided to move production of its premier phones to Vietnam.

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China is currently the world’s production hub, but it may no longer remain that way post the coronavirus pandemic as companies have started to look for other economic avenues to move their production facilities, in order to reduce the dependence on China.

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According to the Nikkei Asian Review report, after the US-China trade war last year and the coronavirus outbreak in the current year, American technology giants Apple, Google and Microsoft are reportedly looking for shifting their production base outside China.

Google and Microsoft are looking at Vietnam and Thailand to manufacture their new phones, personal computers, and other devices amidst the coronavirus pandemic.

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Google is set to begin the production of its low-cost smartphone Pixel 4A and its flagship smartphone Pixel 5A in Vietnam. Google has also asked a long time manufacturer to help ready production lines in Thailand for its smartphone-related products and the first batch of the merchandise is expected to be shipped in the first half of 2020 itself.

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Microsoft too is scheduled to begin production if its notebook and personal desktop computers in northern Vietnam in the second quarter of this year at the earliest. Google started its shifting out from China last year as it asked one of its partners to covert an old Nokia facility to handle the production of Pixel phones while approving another facility in the same country.

Google also moved its data server center production to Taiwan last year to manufacture its Nest Wifi internet router.

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However, not just US companies, even Japanese and other European companies are reportedly looking to move out of China. According to South China Morning Post, a survey conducted by the German Chamber of Commerce in China and the European Chamber of Commerce in China said that almost half of the organizations that participated in the survey predicted a fall in profit margins by 20%.

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In-fact Japan has earmarked $2.2 billion dollars of its economic stimulus package to help manufacturers move out of China. Chinese President Xi Jinping was supposed to be on a state visit to Japan early this month, however, the visit was postponed due to the global pandemic.

A survey by Tokyo Shoko Research found that 37% of the 2600 companies that took part in the survey were looking for places outside of China.

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