More Industries Adopting “China+1” Risk Management Strategy

I’ve previously written several posts on the reduction of trade between the US and China. This is largely caused by the escalating and evolving trade war. Companies in a growing number of industries are managing Chinese sourcing risk by adopting the stragegy of diversifying their supply chain to include China plus another source outside of China, known as the “China+1” strategy.

A recent study by the Taiwan External Trade Development Council (TAITRA) shows four regions rising in global exports, as China’s role diminishes: India, Southeast Asia (ASEAN), Mexico, and Central & Eastern Europe.

Industries trending to the China+1 approach include: automotive, electronics, AI servers, semiconductors, aerospace, smart healthcare, and advanced energy.

India is seeing growth in electronics manufacturing. Southeast Asia is expanding manufacturing of semiconductors, PCBs, and battery manufacturing. Mexico is increasing manufacturing in many industries due to its young labor force and proximity to the US. Central & Eastern Europe are expected to increase manufacturing of EVs, electronic components, and more.

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David Shiller

David Shiller is the Publisher of LightNOW, and Senior Business Development Consultant at Capacity Consulting, a North American consulting firm providing business development services to advanced lighting manufacturers. The ALA awarded David the Pillar of the Industry Award. David has been co-chair of the ALA’s Engineering Committee since 2010. David established MaxLite’s OEM component sales into a multi-million dollar division. He invented GU24 lamps while leading ENERGY STAR lighting programs for the US EPA. David has been published in leading lighting publications, including LD+A, enLIGHTenment Magazine, LEDs Magazine, and more.

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