The ‘China plus one’ strategy has brought factories, jobs and investments to Southeast Asia, but not the expected added value: design, key components and technological know-how remain concentrated in China. Vietnam, the main beneficiary with GDP growth of 8.0% in 2025 and exports to the United States surging 28.1% to $153.2 billion, remains specialized in final assembly rather than intermediate component manufacturing. Several companies, including Target, are abandoning Southeast Asian sourcing due to an insufficiently developed industrial ecosystem and repatriating their supply chains to China. In the long term, the influx of cheap Chinese exports risks transforming the region into a simple consumer market and accelerating premature deindustrialization, particularly in Thailand where GDP growth has slowed to 2% under pressure from Chinese electric vehicles.
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