The draconian policy to fight against the COVID pandemic is accelerating the manufacturing migration from China—the world’s factory—and the country is gradually losing its export dominance.

CNBC reported that China had surrendered more market share in key sectors to neighbors.

Citing data from transport economics firm MDS Transmodal, CNBC noted that various manufacturing industries are moving from China to other Asian countries. 

They include furniture, clothing, footwear, travel goods, and handbags.

In addition, China also sees a decline in its share of mineral exports to office technology.

MDS senior adviser Antonella Teodoro pointed out that China’s “zero-COVID” policy is affecting factories, and manufacturers are looking for alternative destinations. So China is losing market share to other countries, including Vietnam.

Teodoro said Vietnam’s proximity to China and cheap labor rate were suitable options.

In July, shipping company MSC and the Vietnam Maritime Corporation announced they would build a new transshipment container terminal near Ho Chi Minh City. 

The project, once completed, would be the largest in Vietnam.

MDS Transmodal data shows that the apparel industry has moved from China to Malaysia and Bangladesh.

Akhil Nair is senior vice president of products, Asia Pacific for SEKO Logistics. 

He said that since the United States imposed trade tariffs on China in 2018, the world has been looking for alternative sourcing places apart from China. But China’s “zero-COVID” policy has led to supply chain disruptions, causing international customers to accelerate their hunt for sourcing regions.

Since the COVID pandemic lockdown began in early 2021, the total vessel capacity departing Chinese ports has been declining.

CNBC citing data from logistics information firm Project44 shows that before 2021 the vessel capacity was about 11.2 million Twenty-Foot Equivalent (TEU) a month. But it fell to only 8.6 million TEU in September this year.

Logistics managers said that orders for goods arriving in the U.S. from China in November are expected to decrease by 40-50%.

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