Chinese Manufacturers Relocating Operations to Other Countries to Avoid Tariffs on Exports

A few days ago, we wrote about how Vietnamese customs were planning to clamp down on Chinese manufacturers importing and repackaging their products before sending them to US and European markets in a bid to avoid tariffs. While that story only explored illegally repackaged products, there are some Chinese manufacturers moving their operations outside the country to bypass the hiked tariffs.

As Trump continues to hike tariffs on Chinese manufactured goods, companies are considering relocating to alternate, cheaper locations like Myanmar, Vietnam and Cambodia. In addition to the ongoing tariffs war, higher wages and a labor crunch in China have fueled this decision for relocation.

Cheap and abundant labor makes Myanmar an attractive destination for Chinese companies looking to avoid tariffs and maintain their bottom lines. According to data from the country’s Directorate of Investment and Company Administration, in the 12 months till April 2019, Chinese projects have invested $585 million in Myanmar, fueling a significant expansion of its industrial sector.