China Advantage Wanes for OEMs

Hailey Lynne McKeefry, Editor in Chief, EBN
5/1/2015

Once the go-to low cost manufacturing location for the electronics industry, China's reign may be waning as the top pick. In fact, some OEMs are heading back to the U.S. hoping to get supply chain advantages and better total cost.

Although currently reductions in manufacturing are just a small blip in the bigger picture, it's a trend that points to a larger reality. "The HSBC China Manufacturing PMI rose to 49.7 in the final reading for January, from 49.6 in December, and revised down from the flash reading of 49.8," said Hongbin Qu, chief economist, China & co-head of Asian Economic Research at HSBC said, commenting on the China Manufacturing PMI survey published in February 2015. "Both new orders and new export orders saw downward revisions, but still signaled marginal expansion. We think demand in the manufacturing sector remains weak and more aggressive monetary and fiscal easing measures will be needed to prevent another sharp slowdown in growth."

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