Navigating the Relocation Trend: The Rising Shift of Multinational Corporations from China to Other Countries

Abstract

This study explores the rising trend of multinational corporations relocating their operations from China to other countries, examining the drivers behind this migration and its potential implications for businesses and the Chinese economy. Based on institutional theory and the resource-based view, the study identifies factors influencing MNC relocation decisions, such as rising labor costs, trade tensions, market dynamics, and regulatory changes. Through an analysis of potential benefits and drawbacks, as well as opportunities and challenges for the Chinese economy, the study contributes to the existing literature by shedding light on the nuanced motivations driving MNC relocations and their impact on global business strategies and economic development. This research provides valuable insights for policymakers, business leaders, and academic researchers seeking to navigate the complexities of the worldwide economy. It underscores the need for further empirical research to explore the long-term implications of MNC migration trends.

The Potential Effects of De-risking from China on Global Economic Growth and Trade Patterns

“…There has been a growing trend of multinational corporations and countries looking to diversify their supply chains away from China in recent years. This trend has been driven by various factors, including the COVID-19 pandemic, rising labor costs, trade tensions, geopolitical uncertainties, market dynamics and consumer preferences, regulatory environment, and policy changes, and the need to protect intellectual property (IP) rights (Goncharova et al, 2023;Basu & Ray, 2021;William, 2024). The "China-plus-one" strategy, which involves moving part of the supply chain to other Asian countries, has been identified as a potential approach for corporations looking to reduce their dependence on China (Basu & Ray, 2021).…”