15/09/2026

BIZ & FINANCE TUESDAY | SEPT 15, 2026

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BEIJING: A year after shifting production and sourcing out of China to avoid higher US tariffs, some companies are learning that replicating the country’s factory ecosystem is not so easy and are bringing manufacturing back. Last year, as President Donald Trump’s tariffs set off a global rush to diversify supply chains, Heather Kuang’s China-based metal casting company lost business when a major US customer shifted some orders to India. The customer has since returned with new orders after running into problems there, said Kuang, vice-president of family-owned Dawang Metals, based in the northeastern Chinese city of Dandong. She declined to identify the agricultural machinery company. Dawang also explored moving some production offshore before abandoning the plan. “China’s supply-chain advantage is still too great, and it is difficult to replicate domestic production elsewhere,” Kuang said. Companies continue to invest in Southeast Asia’s manufacturing hubs, but the “China plus one” push, under which firms hedged China exposure with operations in other lower-tariff countries, has proved harder to execute. While there is not yet hard data showing how much sourcing is returning to China, some buyers who shifted production elsewhere said they are keeping or restoring Chinese suppliers because factories abroad struggle to match its skilled labour, supplier networks and reliable power. Even so, rival manufacturing hubs India, Indonesia and Vietnam have attracted investments from electronics, automotive and other manufacturers despite persistent concerns. The shifts are unfolding ahead of an expected meeting between Trump and Chinese President Xi Jinping this month, which businesses will watch for clarity on a proposed mechanism to lower barriers on some non-sensitive goods. US retailer Target has moved some orders back to Chinese suppliers, two people familiar with the matter said, citing supply-chain disruptions and production constraints. The sources did not disclose the value or duration of the orders. Shein, the Chinese fast-fashion retailer, is also scaling back some operations in Vietnam, according to people familiar with its operations there. Target and Shein did not immediately respond to a request for comment. Jin Chaofeng, an exporter of outdoor furniture in Hangzhou, eastern China, said he shut a workshop in Ho Chi Minh City that he opened in 2024 and moved production back to China this year. He said he had trouble finding the equipment he needed in Vietnam, and needed to bring in basic items from China such as screws and moulds for cup holders.

Some firms that left China are heading back

o Factories abroad struggle to match its skilled labour, supplier networks and reliable power

A 71-year-old retired public servant at the same training session as Hwang recalled spending over 30 minutes trying to flag down a taxi on a busy Seoul street. The cabs kept passing him to pick up younger riders just metres away who were using smartphone apps to hail their rides. “I felt utterly useless,“ the man, who gave only his surname, Park, told AFP. The digital divide can also pose a real threat, leaving older people vulnerable to high-tech crimes such as online scams or limiting their access to medical services, experts say. A state survey last year found that 60 per cent of South Koreans over 60 struggle to use public and commercial services due to lack of digital skills – compared with just six per cent of those under 40. “The intergenerational digital divide (in South Korea) appears wider than elsewhere,“ The arithmetic that once justified moving abroad has changed, he said. “Once I factored everything in, the overall cost was not much different, so there was no point.” One reason for the shift from China was to exploit differences in US tariff rates. China faced an effective US tariff rate of about 20%, compared with 6.1% for Vietnam, 13.4% for Indonesia and 4.5% for Thailand, according to Economist Intelligence Unit estimates in July. But that advantage has narrowed as Washington extended tariffs to a wider range of countries, prompting some Chinese manufacturers to rethink overseas investment, the EIU said. Access to power has become as decisive as price, especially after the Middle East crisis tested the energy reliability of manufacturing bases, some companies said. Stanislaw Krykun, CEO of Poland-based packaging firm DST Pack, worked with his six-year Chinese manufacturing partner to get through the painful period when plastic input costs spiked 15% in April because of soaring oil prices. “In case of any crisis, the Chinese production plants will be the most stable plants you can use,” Krykun said. DST Pack sources 80% of its production from a factory in Shenzhen, with 10% each from long-established backup plants in the US and Europe, he said. Those alternatives cost two to three times more per unit. Krykun had dismissed relocating to Southeast Asia after seeing a business partner struggle in Vietnam. “He faced a lot of issues starting with production and finishing with the export. “The system there doesn’t really work as smoothly as it works in China.” Guan Baokui, a Qingdao-based lawyer who advises manufacturers, said Vietnam and Indonesia suffer from an “unstable and not continuous” electricity supply, a problem that intensified as global oil prices surged. Not all exporters are seeing US demand return.

Shein is reportedly scaling back some operations in Vietnam. – REUTERSPIC

herself – including enrolling in her favourite dance class at the local community centre. “Before, I could easily do all of these just by calling or showing up in person,“ Hwang said. Officials now provide nationwide training for the “digitally vulnerable” for using mobile devices, apps, and AI. Vans packed with tech devices and mock kiosks drive to community centres and regional festivals popular among the elderly. In 2025, over 65,000 sessions were held for some 650,000 people over 60. Hwang gathered along with 30 neighbours for a session last month, practising how to pay hospital bills at mock kiosks, patting a prancing robot dog, or asking their phones: “Gemini, tell me about tomorrow’s weather.” She has undergone similar training several times – and said the lessons helped her confidence – but noted she was “so envious of young people who can do all this so easily”. “I wish I had been born young in today’s world,“ Hwang added. – AFP keeping roughly one-eighth of its total capacity in Vietnam as a hedge. She said the company could expand there again “if Trump goes crazy” and tariffs spike. Exporters said they do not expect the Trump-Xi summit to resolve their problems. “We gave up expecting much from Trump long ago. We can’t depend on him for our livelihood or pin all our hopes on him. We have to find export markets to sustain ourselves,” Kuang said. – Reuters

Summer Hu, a Ningbo-based sales agent for gift and outdoor sports products, said her company had not seen US orders increase. “We are not that optimistic,” Hu said. “The competition is too intense.” Vietnam remains one of the biggest beneficiaries of supply-chain diversification, attracting billions of dollars of foreign investment. Yu Yangxian, who sells electric lockers and vending machines, said her company is

South Korea aims to save seniors lost in digital age SEOUL: A little cheer rose for 79-year-old Hwang Sun-hee after she managed to place an online order at a training session in South Korea, which has one of the world’s starkest digital divides for seniors. Nearly 90 per cent of taxi drivers use ride-hailing apps, yet more than 80 per cent of South Koreans over 60 still hail cabs by hand, a survey showed. said Kim Jeung-kun, professor of senior business at Kangnam University in Seoul. He noted that the nation’s “intensely compressed” industrialisation happened in just a few decades, while it took centuries in many Western countries.

Age gaps in digital literacy are a global concern, yet the gulf has widened massively in the hyper-connected and fast-ageing country, prompting national campaigns to bridge it. “You can’t do anything without smartphone apps or a kiosk machine ... It’s too much for old folks,“ Hwang said at a senior community centre in Suwon, south of Seoul, during government organised digital survival training. The so-called grey digital divide has provided some striking examples in the nation of about 52 million, home to world-leading smartphone and memory chipmakers. Last year, several baseball clubs began reserving a small number of tickets for on-site sales after reports that older fans, cash in hand, approached younger people at stadiums and pleaded with them to buy tickets from machines.

South Korea – which had a GDP per capita below US$100 in the wake of its 1950-1953 war – is now the world’s 15th largest economy, according to the IMF. “Many of our elderly grew up at a time when many had no electricity, landline phones or proper schooling,“ Kim added. The nation’s older cohort is massive – South Korea is what the UN calls a “super-aged society”, where more than 20 per cent of the population is over 65. In response, South Korea’s public tech training for the elderly began in 2020, when businesses and services turned online during the Covid-19 lockdown. Hwang, echoing others in the two-hour class, said she’s made it this far by relying on her children for daily tasks she once managed