Beijing released its December FDI figures today and they continued the trend in for the past year, down 4.5% on the month and 3.7% for the year:
There’ll be any number of reasons for this. The slowing economy, increasing labour costs driving foreign capital elsewhere and a diminishing role for international capital in fixed asset investment as it becomes more and more stimulus driven.
Whichever way you look at it, the slowing is a part of rebalancing.
I know of some companies that are starting to branch out their manufacturing to India, Spain, Portugal and even Romania.
Things are just not as cheap as they use to be in China, and why settle for second best when you can get competitive prices elsewhere with arguably better quality.
Put the US in there as well.
Add Slovenia to the list.A range of Bosch white goods comes from there.
There is a concept in science called a “black box“. China is a black box.
Who in their right mind would invest into a black box?
China is proving increasingly difficult to get cash out of and becoming more difficult to use in supply chain design.
The exuberance of working with/in China is not what it was. This is not surprising.
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