Several months ago we put together several pieces saying that Apple and other major component manufacturers would leave China and move to other parts of Asia. Well, the Apple suppliers are walking away from China and according to sources are now moving to India and South-east Asia as these firms expanding production outside of China.
Foxconn, the Taiwanese group that assembles iPhones and builds robots, and other tech toys for China and other countries around the world announced that they are investing heavily in India – to the tune of 213 million dollars. They are making is clear that they are expanding a subsidiary in India and Vietnam.
Other firms such as Pegatron, another firm in Taiwan accounts for up to 30 percent of Apple`s assembly orders, is now expanding in Indonesia, Vietnam and India. These firms are moving out of China and one has bought space on an Indonesian island near Singapore for a quick, temporary place to set up manufacturing as it shuts down manufacturing lines in China.
There is bigger issue that is part of this “leaving China boom.” There are more and more firms that are leaving because of forced technology transfers. EU Commission for Trade Cecelia Malmstrom made it clear when speaking about China (in one of our articles last month) that technical transfers will stop. China has leveraged its massive market potential for those looking to sell products, forcing these firms to share technology only to get access. This technology for access relationship is fading fast.