Big tech companies are moving factories out of China

China

Apple, Amazon, Google, Samsung, Volvo. These are just a few of the big names that are closing up shop and leaving China.

“A weakening economy. Lockdowns related to COVID-19. Reciprocal trade sanctions. Potential conflict over Taiwan. There are many reasons for companies to curb operations in China,” says American Enterprise Institute (AEI) senior fellow Derek Scissors.

Doing business with China has never been easy. Cheap labor and infrastructure always comes at an indirect cost.

Violations of human rights. Theft of intellectual property. Business restrictions. Market manipulation. Compulsory involvement of the board of the Communist Party.

A recent political risk study conducted by Willis Towers Watson found that 95 percent of multinational corporations are concerned about China. This is up from 62 percent in 2020.

“The vast majority of respondents believed that trends toward geostrategic competition and economic disengagement between China and the West would intensify in the future,” the report said.

“Most of the respondents expressed concern that private companies would be targeted in international diplomatic disputes”, he writes further.

There is a risk of becoming a political toy – just as the gas economy in Europe has been manipulated by Moscow – forcing corporations to move.

Apple is shifting part of its iPhone production to India. AirPods, Apple Watch and iPad will go to Vietnam.

Amazon is now taking its devices, FireTV from India and it recently closed its Chinese facility, Kindle.

Samsung in 2019 moved its production to Vietnam. Now Microsoft and Google are following suit with the production of their Xbox Pixel phone.

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