Why Are Companies Moving Manufacturing out of China?

Manufacturing is a major industry in China, as we know. A third of supply chain leaders plan to move manufacturing out of China by 2023, according to Gartner research. Here’s why so many companies are moving out:

Companies learned from the recent Covid-19 pandemic that they cannot rely on just one supplier. Meanwhile, governments across the globe are trying to get companies out of China. Many companies are considering Mexico as a potential location.

In 2018, the United States imposed tariffs of 25% on Chinese goods. Importing goods from China into the US was therefore very expensive.

Three or four decades ago, Chinese labor was one of the cheapest in the world. In recent years, it has greatly increased to $14000/year, which is a huge increase. Manufacturing in China has become more expensive.