← Business Models: Core (all topics)
China-plus-one sourcing
What it is
The strategy by which global buyers add a second manufacturing source outside China to reduce concentration risk, after pandemic disruption and rising trade tensions exposed the danger of single-country dependence
It is a diversification of supply rather than an exit from China, so India competes with Vietnam, Thailand, Mexico and others for the second slot
Impact on industries
- Opens export opportunities that were closed while Chinese suppliers held incumbency on cost, particularly in engineered and specification products
- US and EU trade measures against Chinese goods actively push buyers to qualify alternatives, so policy elsewhere creates the opening
- Qualification is slow and demanding - audits, samples, trial orders and certification take years before commercial volume follows
- India is not the automatic beneficiary - and the dynamic reverses domestically as Chinese output shut out of the West diverts into India
Industries affected
Steel wire/wire rods
Pesticides & Agrochemicals
Speciality Chem-Fine Chemicals, Intermediates & CSM-Large (Large-Cap)
Speciality Chem-Fine Chemicals, Intermediates & CSM-Mid & Small
Fastener
Textile-Garment & Made-up Exports
Process eq
Pharmaceuticals-API & Bulk Drugs (Large & Medium)
Industrial Gases