The global supply chain as we know it is being transformed by several forces, including shifts taking place in China, the reduction of the multilateral trading system, and recent disruptions caused by natural disasters. Whether in isolation or combined, these forces have significant implications for the global economy.
As recently as three years ago, the headline business news was all about China as 'the world’s factory' and about 'the China price' redefining the production and cost of consumer goods. Today we have almost come full circle: 'China, global factory' is morphing into 'China, global consumer'. What has changed is that China is no longer the lowest-cost producer. Today, if companies want to source the lowest-cost goods, they look to other countries – in particular Vietnam, Cambodia and Bangladesh, the new front-lines of low-cost manufacturing and export processing.
