Until now, Chinese manufacturers have set up on the coast in order to have easy access to shipping.
Now they are moving inland, and while many of them are setting up near railway hubs, the emergence of air freight is changing the manufacturing game.
Foxconn, the giant Taiwanese company that manufactures a range of high-end products, including the iPad, iPhone and Playstation, is moving to Henan province. Others have moved to Chongqing and Chengdu.
The increasing reliance of Foxconn and others on air freight was made clear during the volcanic ash problems earlier this year, when Foxconn was forced to reroute some production to its European factories in order to hit its delivery times.
Both Foxconn and HTC, another Taiwanese electronics manufacturer, confessed that "most" of their products were shipped by air. Since iPhones and the like are small and high-margin, this makes sense.
And it is not just the finished products. Because of the price fluctuations in the price of expensive components and raw materials, those are flown in too.
The consequences of the development of air freight are potentially significant. There’s no reason for factories to remain on the coast if they are flying their products, and indeed there is an argument that they would be better placed in the West of China, where flights to Europe are shorter, than out East. It will be interesting to see who else sets up inland.
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