China Still a Top Destination for Manufacturing

Published By : 08 Jul 2015 | Published By : QYRESEARCH

The current sluggish economy in China has not affected its position as the most favored manufacturing destination in the emerging markets. However, its position is being threatened by other developing nations such as Indonesia and Mexico. In the last ten years, China has topped the list of destinations for greenfield manufacturing facilities by foreign companies. This has been attributed to the nation’s inbound capital investment on manufacturing projects. According to the reports by fDi Markets, since 2005, China has received three times the number of projects and capital investment of its closest competitor India. 

However, with the present Chinese economy threatening the country’s manufacturing sector, other developing nations have taken up the opportunity. Mexico has emerged as the second most sought after manufacturing destination. Last year, Mexico received 165 investments. In terms of capital investment, Vietnam has come up as a fast riser at US$19 billion. China has received capital investments worth US$40 billion whereas Mexico has received US$16 billion in 2014. Though India has attracted 149 manufacturing projects owing to an FDI boom, the net worth of capital investment is low at US$7 billion. 

Geopolitical tensions and economic uncertainty has made Russia less popular as a manufacturing destination. In terms of number of projects received between 2010 and 2014, the nation ranked fifth on the list of top manufacturing destinations. However, last year, it slipped to tenth spot. China has come to the rescue of saving Russia’s position on the list with capital investments worth US$9 billion from the Chinese automotive companies. Last year, Indonesia attracted merely 56 projects worth US$12 billion but the country’s performance as a manufacturing hub has been strong in the past five years. fDi Benchmark has pointed out that Indonesia’s success could be in part cost-driven.
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