StockTalk (6.12): "China Plus One" Strategy? What new investment opportunities does the resilient global supply chain bring forth?

The "China Plus One" strategy is a business approach that companies choose to expand their operations outside of China while still maintaining a presence in the country. China's position as the "world factory" is hard to shake due to its previously lower production costs, extensive and complete industrial chain, abundant labor resources, and other advantages. However, the international supply chain is now undergoing a reshuffle. India has emerged as a popular choice due to its vast market potential and growing middle class, with companies like Apple and Sony looking to capitalize on the Indian market. Despite being the world's most populous country, India still faces limitations in the global supply chain due to infrastructure challenges, bureaucracy, and trade policies. Nevertheless, some experts believe that India is progressing rapidly and catching up quickly.

In addition to India, countries such as Vietnam, Indonesia, Thailand, and Malaysia within the ASEAN region are also favored destinations for the "add one" strategy. Vietnam, in particular, has been a major beneficiary of the strategy thanks to its low labor costs and strategic shipping location. The country's manufacturing sector has attracted significant foreign direct investment and experienced impressive export growth in recent years. Thailand is a major automotive manufacturing hub in Southeast Asia, while Indonesia boasts abundant natural resources and a large population, making it an attractive destination for international enterprise industry transfers. Finally, Malaysia is among the fastest-growing economies in Southeast Asia and stands to benefit from the ongoing restructuring of the global supply chain.

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