Prospects for relocation of global value chains away from China for the electronics industry

Abstract

China has been the dominant exporter of a vast majority of goods globally. And electronics is no exception. China truly is the world’s factory when it comes to the electronics industry. A vast majority of the electronics products are designed, manufactured, and assembled in China. They manufacture more than 50% of all the phones in the world. It also manufactures almost all printed circuit boards, an essential component for all electronics. It also is a domingst player in the semiconductor industry, manufacturing 40% of all semiconductor chips. a National University of Singapore estimates that more than half of the world’s manufacturing capacity of electronics lies in China. However, the recent China-US trade relationship where the US imposed heavy tariffs on Chinese exports has led to a domino effect where many of the companies are shifting away from the Chinese market. The Covid-19 pandemic has only added fuel to the already burning fire. The origin of the deadly Virus being the wet markets of China has affected the Chinese manufacturing and logistics industries. With countries like Taiwan and Korea providing a good alternative to Chinese electronic manufacturing, global electronic supply chains are poised to move away from the Chinese manufacturers. In this project, we try to understand this shift in the global value chain from China to other Southeast Asian countries like Taiwan, Malaysia, Korea etc.