Trade war is driving a production shift out of China, says UBS
January 9, 2019
The majority of exporters have already made efforts to shift at least some production operations out of China as threats from the US-China trade war impact their businesses, according to a survey by UBS.
Around 37% of the 200 export manufacturers polled said that they have transferred production in the past year, while another 33% plan to do so in the coming six to 12 months, Caixin reports.
The companies planning a move said that they will shift at least 30% of their production capacity overseas, largely to countries like the US, Hong Kong, Japan and Taiwan. Southeast Asia was a less popular destination, the survey showed.
“Although higher tariffs are on hold and business sentiment may have improved following the Xi-Trump G20 meeting, we expect trade war related uncertainties to linger and hurt manufacturing capital expenditure in 2019,” UBS analysts wrote in the report.