China, ‘Factory of the World,’ Is Losing More of Its Manufacturing and Export Dominance, Latest Data Shows
China is losing more manufacturing and export market share in key sectors to Asian neighbors, with recent “Zero Covid” policies a significant factor leading to further erosion in its long-time dominance of global trade.
According to data shared with CNBC by transport economics firm MDS Transmodal, China has lost ground in key consumer categories, including clothing and accessories, footwear, furniture, and travel goods, while also seeing declines in its share of exports from minerals to office technology.
“China’s Zero Covid approach is impacting production and manufacturers are seeking for alternatives to the current ‘factory of the world’,” said Antonella Teodoro, senior consultant at MDS Transmodal.
“Drilling down to the individual commodity groups exported from China, we observe that China has been continuing to lose market share, with Vietnam amongst the countries gaining importance on the international landscape,” Teodoro said.
That view matches other recent market research on the gains being made by Vietnam in particular.
Teodoro said Vietnam’s close proximity to China and cheap labor are reasons why Vietnam is considered a suitable alternative.
Ocean carrier MSC, along with the Vietnam Maritime Corporation, announced in July the creation of a new transshipment container terminal project near Ho Chi Minh City. Once completed, this terminal would become the largest in the nation. Both Maersk
and CMA CGM are investing in their own facility expansions in that region.
“Shipping lines are looking for new markets and investing and expanding new markets,” Teodoro said. “They perceive demand and are creating a market with these investments.”
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