MNCs reassess global supply chains, particularly China ops: S&P Global

China's share in global exports has held up even though it has declined in the United States. Other Asian emerging markets and Mexico have made modest gains at the expense of Asia's developed economies. China's share of global imports is higher than it was six years ago.

Meanwhile, as foreign direct investment (FDI) into China seems to have plunged, Asian emerging markets (EMs) and Mexico have generally not seen significant increases.

Global supply chains will continue to evolve, but S&P Global thinks China's role in global exports won't diminish drastically and most other Asian EMs won't be major net winners of relocation from China.

Even before these recent developments, firms in sectors such as textile and sneakers moved production out of China as wages and other costs rose rapidly. Such relocation has intensified and broadened out to other sectors.

Apart from moving out of China, multinational companies are now more likely to install new capacity elsewhere. Moreover, current plans and discussions in many countries on restricting trade and investment ties with China suggest that more supply-chain adjustment is on its way, S&P Global said in a research article.

China's overall global market share in the 12 months to April 2024 was slightly higher than six years earlier.

Fibre2Fashion News Desk (DS)