Chinese Production Bases Will Maintain Current Scale
Even though the costs and controls of the Chinese business environment have increased, China continues to be one of the top markets in the world and possesses complete industry chains. There is still some room for negotiation with some of the business conditions as well, so in the short- to medium-term ICT companies will probably continue to keep running their Chinese operations. Risk diversification however may see new production capacity directed to emerging production bases instead.
Pursuit of Market Demand Will See India Become the Next Emerging Production Base
With its strong market potential, India, which has high tariff barriers and a unique environment, will become a favored choice for businesses looking for their next target of their Asian expansion strategy. They will, however, need to contend with challenges including the complex and numerous tariffs, inefficient company registration processes, inadequate logistics system, employees' unique culture and high turnover rates, and a living environment that has much room for improvement.
Northern Parts of Southeast Asia to Become Emerging Production Bases for Those Seeking Lower Production Costs
Despite the incomplete infrastructure and industrial development, the convenient geographical position has made northern Vietnam a choice for ICT manufacturers looking to diversify risk and reduce production costs while still realizing synergies with southern China. One issue worth noting is the fact that Vietnam's population is far smaller than China. If the number of companies entering the region increases, the increase in production costs will be significant as well. The northern part of Southeast China will become key to companies looking to create a geographical balance between facility locations.