IS CHINA NO LONGER THE “WORLD’S FACTORY”?

• July 26, 2022
• by Luiz Carlos
• Aluminium, Updates, Machining
• Comments Off on A China não é mais a “Fábrica do Mundo”?

IS CHINA NO LONGER THE “WORLD’S FACTORY”?

Two and a half years after the COVID-19 started spreading, the phrase that has been said for a few years – China is no longer the “world’s factory” – has become a bigger topic for discussion with greater weight in the industrial segment. One of the reasons for this change of stance in the industry around the world was the crisis in the automotive segment, which started, among other reasons, due to the lack of micro components. These components were mostly produced in China and Taiwan, and with limitation on the borders many plants and assembly units around the world that depended on this import for their production flow to work had to close doors.

With this experience, the market was alerted to the issue of having centralized sources of production, because there is the risk of not having the end product delivered due to uncontrollable factors, like the pandemic was. For decentralization to actually happen, some actions are being conducted – for example, millions in incentives are being distributed to build chip plants in territories from other continents, such as Europe and America.

However, China is also searching for other ways to recover the trust before it risks losing its “crown”. A legislation named “50:50 rule” established that foreign assembly units installed in the country had to necessarily have local partners, without owning more than 50% of the production’s shareholding. In January 2022, the Ministry of Trade and the National Development and Reform Commission (NDRC) confirmed the end of these trade-related restrictions in the Chinese territory, opening an advantage to welcoming more assembly brands in the country.

After different events, this dissolution of plants around the world is already a reality. In March this year, the industrial production in China reported its lowest level in two years, according to information posted on the UOL Economia page. Meanwhile, the Brazilian market, for example, is gearing up and qualified in engineering services, reporting growth after the coronavirus, according to the Brazilian engineering association. Thus, the country is prepared for this movement and reception of new factories in the Americas.

From all these forecasts and evolutions in the international industrial segment, SAMOT Brazil and Mexico have an important role, with their world-class excellence machining products. The preparation and capacity of service in this region is guaranteed, with the ability to welcome this new demand that may arise in the Americas over the next few months and years.