China Outbound: Shifting Demographics and Manufacturing Trends in Asia

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Why and Where Foreign Manufacturing Investment is Slipping out of China and into Asia 

In this edition of China Outbound, we highlight the shifting demographic dynamics taking place across Asia and explore their impact on manufacturing centers throughout the region. As China grows from a manufacturing-focused economy to one driven by consumer demands, these demographic trends will be of great interest to companies looking to establish a manufacturing presence in Asia to serve China’s expanding market. To stay up-to-date with the latest trends across China and Asia, subscribe to our complimentary weekly newsletter concerning legal, tax, investment and regulatory updates throughout Asia.

Asia’s Improving PMI Against China the New Normal  
HSBC’s recent Purchasing Managers Index revealed a contraction in confidence among manufacturers based in China. This weakening sentiment was in stark contrast to other countries in the region, with Indonesia, Vietnam and India all showing an expansion in confidence among purchasing managers in those areas. In this article, we discuss the demographic trends responsible for this shift and look towards the future impact of these developments.

Malaysia Is World’s Best Value Manufacturing Destination
With China’s ongoing shift from a manufacturing-based economy to one driven by consumer demands, investors have increasingly sought new locations for their manufacturing operations. This trend was made apparent in Cushman & Wakefields’ 2014 Manufacturing Index, which ranked Malaysia, Taiwan, South Korea and Thailand above China as the best value manufacturing locations in the world.

Demographics Show India Will Outperform China
The phenomenal rise of China over the past two decades has often eclipsed that of India, whose economic growth and development has appeared sluggish by comparison. Major demographic shifts in both countries, including an aging population in China and a workforce set to double in India, could greatly influence both country’s growth potential. In this article, we examine these demographic changes and consider the economic implications in China and India.

Developing Asian Manufacturing Capacity from a China Base
As the China-ASEAN free trade agreement reduces tariff barriers across the region, many enterprises are seeking new manufacturing destinations throughout Asia to take advantage of competitive labor costs and strong manufacturing demand from China. With this in mind, we examine the various structural, legal, tax and other issues that face companies based in China when they wish to consider alternative Asian locations for their manufacturing operations.

New Issue of Asia Briefing: Singapore Holding Companies – The Gateway to ASEAN  
As China-based companies are increasingly looking to expand into Asia, Singapore is developing as the primary low tax location to establish these companies’ ASEAN operations. In this issue of Asia Briefing, we highlight Singapore’s unique position as the ideal gateway into Southeast Asia and examine the regulations surrounding the establishment of a holding company in the country. This issue will be especially beneficial for companies looking to take advantage of the China-ASEAN FTA.

New Issue of India Briefing: An Introduction to Audit in India
Today, April 1, marks the beginning of India’s audit season. The annual audit process can make for a hectic and busy time for foreign companies with operations in the country. To smooth the navigation of audit in India, this issue of India Briefing provides readers with an overview of India’s annual audit process and highlights the audit regulations and accounting standards that govern the annual inspection.

Related Reading

For  further news sources concerning Asia, please refer to our other websites as follows:

Asia Briefing  
Established in 1999, Asia Briefing Ltd. is dedicated to providing individuals and enterprises with the latest business and regulatory news as well as expert commentary relating to conducting business in emerging Asia.

ASEAN Briefing  
ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam), ASEAN Briefing aims to be the premier online source for technical and business information concerning investment and trade with ASEAN countries and includes downloadable copies of all ASEAN and member country double taxation and free trade treaties held with China.

India Briefing  
India Briefing has developed into a premium source for insight on doing business in India. It publishes business news concerning foreign direct investment into India, including the most important tax, legal and accounting issues. You can download a complimentary copy of our latest edition of India Briefing Magazine, “An Introduction to India’s Audit Process,” in the Asia Briefing bookstore.

Vietnam Briefing
Vietnam Briefing is one of the few available sources for quality legal, tax and investment insights into Vietnam. Vietnam Briefing publishes a wealth of information contributed to by on-the-ground business professionals in Vietnam. The newest issue of Vietnam Briefing Magazine, “A Guide to Understanding Vietnam’s VAT,” is available as a complimentary download in the Asia Briefing bookstore.

Dezan Shira & Associates
Meet the firm behind these publications. Dezan Shira & Associates is a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the award-winning firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam, in addition to partner alliances in Indonesia, Malaysia, Philippines and Thailand as well as liaison offices in Italy and the United States.

2 thoughts on “China Outbound: Shifting Demographics and Manufacturing Trends in Asia

    The main thrust behind this is that as China’s middle class consumer base increases from 250 million today to 600 million by 2020, that additional manufacturing capacity to service that new market of 350 million Chinese consumers is being placed into Asia rather than China.

    Next month we’ll dig deeper into the differences between the Asian countries likely to receive manufacturing FDI to service the emerging China consumer market.
    – Chris

    Suzanne Hoffmann says:

    I saw your new article about Japanese Manufacturers and Indonesia and India. You guys are ahead of the curve. Foreign manufacturers concentrating on China alone seem to be dreaming: http://www.asiabriefing.com/news/2014/04/japanese-manufacturers-list-indonesia-india-preferred-investment-destinations/
    Great stuff btw its hard to find dialogue like this anywhere.

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