China remains core of global production despite assembly shifts

Global corporations are increasingly adopting a ‘China plus one’ strategy, shifting final assembly operations to other Asian nations such as Vietnam, India, Indonesia, and Thailand to mitigate risks related to tariffs, trade restrictions, and transport disruptions.

However, this shift does not represent a total replacement of Chinese manufacturing. While final assembly may occur elsewhere, China remains the core of global production. Many essential components—including electronic circuits, casings, power modules, motors, and production machinery—continue to originate from China or from companies integrated into Chinese production networks.

Because final assembly is only the last stage of the manufacturing process, an increase in exports from countries like India or Vietnam does not necessarily reflect high domestic value added. Much of the value in these products often stems from intermediate goods provided by Chinese suppliers. OECD data indicates that global production continues to rely heavily on imported goods and services.