Although tariffs are postponed, I would like to say a few more words about the relocation of the manufacturing industry. Relocation is definitely a trend, but it is also very difficult to succeed. The industrial chain is not as simple as everyone thinks; it involves not only raw materials, machinery, molds, and semi-finished products but also countless supporting factors such as talent, transportation, and services.
For example: We already belong to the simplest type of shoe factory. In the past, when a machine broke down in our factory, those parts like switches, air pumps, and motors could be bought in a regular county; for complicated ones, we would go to the Hangzhou Great Wall Electromechanical Market, and for specialized needs, we could visit local machinery factories, and everything could be resolved within half a day without affecting production. When encountering serious issues, we could bring in technical personnel from other provinces within 1-2 days.
Colleagues opening factories in Vietnam often experience minor problems that can delay operations for several days, and major issues sometimes require bringing people from within the country, only to find that something is missing when they arrive, causing at least a half-month delay. This is because the supporting facilities are severely lacking. I’m referring to small factories, and I really don’t recommend relocation for them unless you want to go out and have fun. Larger factories have it a bit better as they can move many supporting factories over. However, the efficiency is still far behind. Today at the factory, Master Tong said that a clothing factory next door just moved to Cambodia, and in the first month, after paying wages, all the workers disappeared.
I haven’t won in learning; my personality always keeps me alert to potential risks. I believe that traditional and outdated production capacities will always need to be outsourced; as long as we can do the high-end work well, we can make a lot of money globally. High-end products are not something just anyone can produce, just look at airplanes. Those unprofitable sweatshops, giving them a little is not a bad idea. Don’t want to let them go? Just raise the prices and improve the workers’ benefits a bit; it’s better to do a little less than to engage in a price war. $BTC
