this post was submitted on 08 Jul 2023
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U.S. President Joe Biden told Chinese President Xi Jinping following his meeting with Russia's Vladimir Putin to "be careful" because Beijing relies on Western investment.

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[–] kurosawaa@lemmy.world 8 points 1 year ago* (last edited 1 year ago)

There are huge differences between China and countries like Vietnam and Mexico.

Vietnam is significantly poorer with poor infrastructure. They don't have the capacity to move enough finished products onto modern container ships today. Their electricity infrastructure is unreliable, their local freight rail is poor, and their roads are awful. Chinese wages are much higher than Vietnam now, but because of economies of scale, China can invest in the best industrial infrastructure in the world to help keep prices down for manufactures in every other part of the business process. Vietnam could catch up one day, but they are far behind. India is also in this same position.

Mexico has wages that are just as high as China, but also has terrible infrastructure and and a failing government. No one in China is worried their products will be held hostage by drug gangs, or that their engineers inspecting their factories will get kidnapped.

China is doing so well because they have planned ahead. They created world class manufacturing infrastructure around Shanghai and Shenzhen that have laid the groundwork for modernizing the entire country. They have done a very good job building their "moat" to discourage manufacturers from moving elsewhere, there are just too many potential savings to keep manufacturing in China rather than take a risk moving elsewhere. Despite the US pushing "derisking" so hard, it will have only a slow impact on pushing companies to leave, because the US cannot actually offer them a better deal to move somewhere else.