In the current global economic landscape, China’s manufacturing industry is facing unprecedented changes. A recent article published on the Singapore Asian News Station website explores whether the “risk de-risk” trend indicates the end of China’s manufactured goods. For a long time, China as the United States’ largest trading partner, this position has now been replaced by Mexico. This change is not only the result of the trend that began during the Trump administration, but also the reflection of “risk de-risk” strategy in the context of geopolitical tensions, nearshore outsourcing, friendly outsourcing.

Although Mexico has become a hot country for enterprises to migrate, U.S. companies are not the only choice to leave China. Brian Hass, director of the John Santon China Center at the Brookings Institute, noted that the trend for enterprises to meet their own interests through diversification has been very obvious. This means that manufacturing is moving, and Chinese companies are also moving to Mexico, with the main goal of getting closer to U.S. customers. WTO economist Victor Stoltenberg said that export growth in many economies is driven by increased imports from China.

However, it is worth noting that the Chinese government began to encourage domestic enterprises to set up factories overseas a decade ago and put forward the ambitious plan to jointly build the Belt and Road Initiative. In this context, thousands of Chinese enterprises have gone overseas in search of lower land costs and wage levels. Xu Qing, deputy director of the Institute for World Economic and Political Studies at the Chinese Academy of Social Sciences, believes that even without geopolitical tensions or other conflicts, the shift of Chinese industry will inevitably occur.

Today, China is moving toward more service-oriented industries, like the economic model of the G7 countries. Despite the challenges facing geopolitical tensions and supply chain restructuring, there are still some industry giants that are increasing investments in China. For example, Tesla is building a new large factory in Shanghai’s port area, not just producing cars. Last year, Tesla CEO Elon Musk met with senior Chinese officials and he was “full of confidence” in the Chinese market.

In addition, with the rise of China’s middle-income group, multinationals realized the huge potential of the Chinese market. The world can also be separated from some of the products made in China, such as electric cars and solar panels. China has become the world’s largest exporter of passenger cars and is the leading country in electric vehicles. According to data from the International Energy Agency, China’s share in global electric vehicle exports has grown from 4.2% in 2018 to 35% in 2022.

Despite the discussion of “de-risking”, China remains a major manufacturing center and technology leader in the world. When faced with the challenge of climate change, whether Western countries want to their environmental goals, whether to “de-risk” their green technology supply chains remains an unresolved question. As Koenig, director of the Li Gong Yuan School of Public Policy, said, it is not possible to constantly blame others for their values for being different if it is to save the planet. Has also stressed that cooperation with China is a necessary condition for U.S. progress in many leading technologies.

In summary, although “risk devaluation” has become a trend in international trade, China still plays an essential role in the global supply chain. China’s manufacturing and technological innovation capabilities remain an important driving force for global economic growth and technological development. In the future, how to balance globalization and the challenge of “risk devaluation” will be major issues facing the global economy.