FINSUM + Magnifi: Supply Chain Disruption Could Bring Trade Back to China

Magnifi in Action: Discover "Manufacturing in China"

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May 27, 2021


The United State’s trade war with China shifted lots of manufacturing from China to other parts of Southeast Asia, specifically Vietnam and India. These moves were meant to curb tariff costs or restrictions but COVID-19 could be changing things. Cases are spiking in Southeast Asia,  most prominently in India and Vietnam, and this could put supply chains on the move back to China. Foxconn, a major Apple supplier was forced to shut down its facilities it recently moved to due to COVID. More importantly, it could pause developing supply chains in India and Vietnam because travel is locked in the region. The situation could benefit China but that depends on how long the outbreak in India and Vietnam lasts. If these factories resume, Chinese exports will slow down in Q2 and Q3, but if they continue China could see annual export growth anywhere from 20-30%. 

(Beijing)

FINSUM + Magnifi:  Chinese economic growth has been strong and much of that is on the back of exports. How long COVID continues in SEA will be critical for the Chinese economy. 

Other news today: Why Biden’s Big Tax Hikes May Not Happen and Inflation Concerns TIPS the Market in Favor of Protected Securities 


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