WILL COMPANIES MOVE OUT OF CHINA?

We might be able to contain the coronavirus eventually but the big question dogging everyone – can the world depend on China?

Over the past couple of times, every time there has been an outbreak of any virus, invariably the source has been China. And this has brought into fore the question of reliability on China.

The situation that we are in today, where supplies coming in from China have been hit has made us wonder whether it is a good idea to centralise everything in one country? With consumerism on the rise, the world is only now realizing how the entire world is dependent on China. Automakers to pharma companies to textile and garment makers, everyone is hit. The coronavirus, apart from showing us the vulnerability of living in an interconnected world, has actually made us more vulnerable. The world’s largest manufacturer, accounting for one-sixth of global economic output is today almost shut down.

But not just as the world’s factory, the Chinese are also some of the biggest consumers – they buy more cars and Apple phones than any where else in the world and Chinese tourists are today big business all across the world.

There were many companies who were as such considering a shift out of China when its trade war with the US raged in full fury. Plus with labour becoming costlier, Govt being less accommodative and massive local competition, foreign companies in China were having a tough time. And with this virus now, many more are certain that they want to reconsider their Chinese strategies.

But is it going to be as easy as that? There are many who say that because it was China, there is surety that it will be contained. Imagine if this outbreak had happened in India? There is no guarantee that our Govt will be able to act as swiftly as China did; that sense of urgency and efficiency is just not there. Summer comes calling and for some many years now, we are not yet able to curb swine flu. And the encephalitis fever claiming children’s lives or the 'lychee deaths' in Bihar? Time and again we have proved that if, God forbid, a major health issue flares us, we will be caught on the wrong foot. So for many who are saying that China’s disaster could become India’s opportunity are far away from reality. For the foreigners, its all the same -if they are worried about China, they will be doubly worried about India. Also with the US economy becoming stronger, there are more reconsidering shifting base back to USA.

If anything, this virus proves the interdependency of the world. The truth is that neither China nor the rest of the world including the U.S. can isolate it without serious and long lasting repercussions. At the same time, China needs to understand that it needs to focus on healthcare first. This time too, once the CODV-19 subsides, China and the world will go back to manufacturing frenzy, all the current fear pretty much forgotten. But hopefully, China will not forget or else, another outbreak, the world will indeed move out of china, lock, stock and barrel.