Key questions this article answers:

  1. How come China is losing some of its share of global manufacturing?

  2. What can Nigeria do to achieve export-led industrialisation for growth?

When you think of manufacturing, it’s almost impossible not to think of China. There’s hardly an item that isn’t or at least hasn’t been produced in China at some point. But China is starting to lose its appeal as the world’s manufacturing capital, no thanks to the constant trade wars with the US, lockdowns that lasted over 1,000 days due to the Covid-19 pandemic, and costlier labour.

On the back of the trade wars, the US reduced its imports from China while doubling its imports from Vietnam and increasing Mexican imports by 20%.

But the US isn’t the only country leaving China; this bouquet of issues has made companies reconsider diversifying their production out of China.

Between 2020 and 2021, about 900 Japanese companies stopped operating in China, while some large companies like Samsung cut down their staff strength there.

Even with all this, China remains the world’s number one destination for manufacturing. As of 2022, China was still responsible for a third of global production. However, as companies lose their appeal for China, they’ll look for other countries suitable enough to replace China in manufacturing.

This presents a unique opportunity that opens for a short window because it takes a mix of economies of scale and established supply chains for a country to truly take China’s place as a manufacturing hub. And given how capital-intensive manufacturing is, companies typically operate their manufacturing plants in said hubs for decades. So, if there’s a time to attract these manufacturing giants leaving China, it is now!

Countries like India and Malaysia are starting