Companies have been moving factories from China to Southeast Asia, anticipating that US president-elect Donald Trump would slap high tariffs on Beijing, industrial park developers in the region say.
Trump, who won a resounding victory on Tuesday, has threatened 60 percent tariffs on goods coming into the US from China, much higher than the levies of 7.5 percent to 25 percent he imposed in his first term, a major risk for the world’s second-largest economy.
Southeast Asia — with auto and electronics factories from Thailand to Vietnam and Malaysia — would likely benefit at China’s expense, said two executives, two business groups, a lawyer and an analyst in the region.
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Developers of industrial parks are adding Chinese speakers and preparing land tracts for factories, a sign of how Trump, who takes office in January, could reshuffle global supply chains.
As Trump geared up his campaign to retake the presidency earlier this year, calls from Chinese customers flooded WHA Group, one of Thailand’s largest industrial estate developers, company CEO Jareeporn Jarukornsakul said.
“There was (already) a relocation to Southeast Asia, but this round is going to be more intense,” she said, referring to Trump’s 2017 to 2021 first term.
WHA is expanding its sales force and adding Chinese speakers to teams overseeing maintenance and administration of industrial parks spanning more than 12,000 hectares in Thailand and Vietnam, Jareeporn said.
Of the 90 factories that have opened this year in industrial parks run across Southeast Asia by Thailand’s Amata Corp PCL, about two-thirds have been companies relocating facilities from China, company founder and chairman Vikrom Kromadit said.
Trump would be a “big punch” to China, potentially doubling the number of firms looking to move from there into Amata’s 150km² of industrial estates in four Southeast Asian countries, Vikrom said.
Construction begins this month on an Amata industrial park in Laos, where China has built a high-speed rail line connecting Kunming in southwestern China to the Laotian capital Vientiane, he said.
Thailand, a regional automobile manufacturing hub, has drawn more than US$1.4 billion in investment from Chinese automakers into its fast-expanding electric vehicle industry.
“We want a lot of investment from China so we can sell to America,” Thai Minister of Commerce Pichai Naripthaphan said.
“I believe this will happen,” he told reporters on Thursday. “The Americans love us, the Chinese love us — we don’t have to choose sides.”
Malaysia, hoping to draw more than US$100 billion in new investments to its semiconductor sector, could benefit from a realignment of supply chains, said leaders of two business groups.
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