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Why ‘China plus one’ is paying off less than Southeast Asia hoped
“China plus one” sent billions of dollars of investment into Southeast Asian factories. Yet the region isn’t capturing enough value.
“China plus one” has been a winning strategy for Southeast Asia. The proposition was simple: Draw in global manufacturers pivoting away from China due to rising costs and geopolitical tensions, and win stronger growth, higher wages, and more jobs for local economies. Yet despite winning billions of dollars of investment in new factories, the region is reaping fewer benefits than its leaders may have hoped. “China plus one has been a net gain for Southeast Asia, but a conditional and uneven one,” says Meng-Chun Liu, the director of the Chung-Hua Institution for Economic Research (CIER), a Taiwan-based think tank. “It brought factories, exports and jobs to the region, but not the design, core components and process know-how that captures most…
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