APAC SwedCham Webinar: After the Storm: Sourcing Trends in China and Southeast Asia, 15 November 2023
On 15 November, SweCham and ARC Consulting hosted a webinar with Marcus Sohlberg, Business Development Director at ARC Consulting, on the topic Sourcing Trends in China and Southeast Asia and how they develop over time.
Trade values are rising in first half of 2023, though being lower than 2021-2022. Global factors affecting trade include geopolitical tensions, economic weakness, trade restrictions, industrial output slowdown, inflation, and high interest rates.
The top three Southeast Asian sourcing countries are: Vietnam, Thailand, Malaysia. Although China's reopened borders have a negative impact on the other sourcing countries, Thailand's automotive, agriculture, and food sourcing sectors are thriving, while for Malaysia there is increased sourcing in electronics and batteries for EVs.
Currently, relocating sourcing from China has decreased, possibly due to prior relocations. However Southeast Asia sees a positive trend, with companies inclined to keep or relocate sourcing and manufacturing to the region.
The top three risk factors companies see in China are: increasing costs, unstable supplier performance, and increased tariffs. Meanwhile, in Southeast Asia, the concerns include increasing costs, unstable supplier performance, and a lack of supply skills. The reasons for relocation include cost savings, risk mitigation, and improved logistics. Interestingly, supply chains currently face disruptions due to new ESG policies, but also the EU Carbon Border Tax, Carbon Peak and Neutrality, and EU Supply Chain Act. In reflection of this, an issue has emerged where many companies are assessing suppliers' carbon footprint data, meanwhile lacking proper data collection.
In summary, there is a growing confidence in Southeast Asia and Europe for sourcing, but China remains the top choice.
We would like to thank Marcus Sohlberg for sharing his valuable insights on sourcing within China and Southeast Asia with us!