India, Vietnam to gain from supply chain shifts away from China in 2023, survey finds
- A survey of global shipping and supply chain industry professionals found that two-thirds of respondents consider India, Vietnam viable alternatives to China
- The Container xChange survey also found that US businesses are expected to relocate more overseas production to geopolitical allies
Companies around the world consider India and Vietnam as attractive alternative locations to diversify their supply chains from China this year, according to a new global survey published by Container xChange this week.
The German container logistics platform surveyed more than 2,600 industry professionals from over 20 countries on shipping and supply chain industry trends for 2023, and found that 67 per cent of respondents believe India and Vietnam will “rise as functioning container shipping hubs” this year.
The survey comes amid mounting evidence that the two Asian countries are becoming increasingly popular among companies seeking to reduce their dependence on China and spread their supply chain risks.
India’s exports of Apple iPhones from April to December last year nearly doubled that in the entire previous financial year, while top Indian conglomerate Tata Group is poised to buy a local plant from a Taiwanese manufacturer that would give the nation its first home-grown iPhone factory, Bloomberg News reported this week.
Meanwhile, Vietnam’s trade surplus with the United States hit a record high in 2022, thanks to strong exports of smartphones and other electronic devices, according to customs data released by the Vietnamese government.
The Container xChange survey also found that US businesses are expected to relocate more overseas production to geopolitical allies, in a move dubbed “friend shoring”. “The objective is to prevent countries, especially China and Russia, from using their market advantages in key raw materials, foods and products,” the survey found.
US personal computer giant Dell Technologies, for example, has decided to stop using China-made semiconductors by next year and may move about half of its production out of the country by 2025, according to Nikkei Asia and Taiwan media reports last week.
In addition to supply chain adjustment, inflation and economic recession are seen by 88 per cent of survey respondents as the biggest impeding factors for their business this year, followed by war, Covid-19 in China and workers’ strikes.
“Europe is hit hard with all-time high inflation, China struggles to cope with the virus, and the US continues to witness hinterland transportation challenges and labour unrest,” said Christian Roeloffs, co-founder and CEO of Container xChange. “Most of these challenges will stay in 2023.”