Country
China
Retains status as a global manufacturing powerhouse with the shift from traditional low-wage, labour-intensive manufacturing economy towards more technology-intensive high value-added production.
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China-plus-one strategy has gained momentum. European and American businesses have diversified their supply chains by shifting part of their manufacturing elsewhere.
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Countries such as India, Indonesia, Thailand and Malaysia benefit from geographic proximity to China, facilitating China-plus-one diversification strategy.
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Recent Developments & Trends
India’s Production-Linked Incentive (PLI) scheme applicable to multiple sectors (including automobiles and medical devices manufacturing), will lead to an increase in fiscal incentives which will ramp up domestic and foreign manufacturing investment in the next few years.
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The country’s National Infrastructure Pipeline and PM-GATI Shakti scheme aim to bridge India’s logistics infrastructure gap and enhance productivity and export competitiveness.
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India
Indonesia
Indonesia's Omnibus Law, a notable legislation introduced in 2021, aims to facilitate companies from a majority of the business sectors to apply for 100% foreign investor ownership.
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This involves easing of the foreign investment restrictions with the Positive Investment List replacing the previous Negative Investment List regime.
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Thailand
Given its strategic geopolitical location and strong capabilities as an imperative automobile manufacturing centre, Thailand has worked on expanding its base of industries through a variety of Government initiatives as well as the development of the Eastern Economic Corridor which aims to incentivise manufacturers to set up a base in the country.
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Malaysia
Malaysia’s proximity to Singapore, favourable risk environment as well as a highly specialised manufacturing workforce enable it to remain as a favoured manufacturing location for multiple businesses spanning mid-high level of manufacturing complexity.
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Vietnam
A plethora of multilateral Free Trade Agreements (FTAs) fortify Vietnam’s competitiveness as a low-cost manufacturing export hub. Multiple ports and favourable real estate costs have made it a preferred hub across the region.
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Source: CBRE Labour & Location Analytics