Southeast Asia may not be the next 'factory of the world' even as production moves from China

WORLD NEWS


The U.S.China trade dispute is pushing American multinational companies to relocate their factories and adjust business strategies for their supply chains in the next 12 months, according to a survey by Bain and Company.

“The shift is happening,” said Gerry Mattios, vice president at consulting firm, Bain.

“Back at (the) end of 2018, when we ran a similar report, we found out a lot of companies — over 50 percent — were actually sitting on the fence … there were no major actions taken,” Mattios told CNBC’s “Squawk Box” on Monday.

But now, 60 percent of the respondents said they are ready to take action, as they see headwinds on their balance sheets, he added. “They see customers having to pay part of it, and they are trying to see how to reassess their supply chains.”

A supply chain is a network between a company and its suppliers to produce and distribute the firm’s products.

Even though China has had a significant cost advantage that propelled the country to its leading position as the world’s manufacturing hub, that advantage is eroding as costs rise, Mattios said.

The survey polled more than 200 high-level executives and senior supply chain officers at U.S. multinationals with operations in China, and sought to gauge their perspectives on the ongoing trade dispute.



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