China's Manufacturing Landscape Faces Threats from Offshoring and Economic Stability Concerns

Supply Chains at Risk: Offshoring and Economic Stability

A report from the Nanhu district in Jiaxing, located in eastern China’s Zhejiang province, has highlighted the pressing need to retain local investments to counteract rising offshoring trends and the associated risks of industrial 'hollowing out'. The research, spearheaded by Zhang Jian, chairman of the Local Political Consultative Conference, emphasizes the importance of support for local enterprises amidst growing global competitiveness concerns.

Offshoring Trends and Their Impact

With key industries in Nanhu lacking complete industrial chains, many local firms are considering relocating operations to Southeast Asia due to low manufacturing costs. A recent survey revealed that disorderly outbound investments could jeopardize the economic stability of the district, urging proactive measures to support remaining local enterprises.

Global Competitiveness and Future Initiatives

As foreign investments and industrial relocations intensify, estimates indicate these shifts could lessen the industrial output growth rate in Nanhu by between 2 to 3.5 percentage points this year. Local government is expected to propose targeted resource policies to mitigate the risks presented by offshoring and promote further investments within the region.