China Plus One strategy; How and Why?

 China. A global superpower for manufacturing, trading, culture, cuisine and c-dramas (what? it's true). So why did countries find alternatives to China?  And what is the China Plus One Strategy (C+1)?


Everyone relied on China for its cheap goods and resources. China had a population, and labour was cheap there; hence, it began producing goods at a cheaper rate than other countries. All the countries supplying their goods were happy, content, and loved their extremely new, reliable partner, China. China had an excellent supply chain, free trade, and tax agreements.


China's economy grew, and along with it, so did labour costs, making things less competitive in the industries where labour costs were almost even. 


Around 2008, the idea emerged. China plus One, diversifying manufacturing and sourcing to reduce dependency on a single country. In 2013, it gained some traction and became a global business trend (MNCs especially).

In 2017, China implemented new environmental rules that reduced outputs. Bam! The US-China trade war: tariffs, supply chain disruption and a rise in geopolitical uncertainties. They finally realised the value of a proverb they learned in elementary school: "Don't put all your eggs in one basket". These issues now affected markets worldwide, and they had no idea what to do with them.  


A year later, there was news of a virus in China. The whole country went into lockdown, no trading, no working and no supplying. Prices skyrocketed, markets were rocked, and once again, people were helpless. Now they wish they had joined the trend earlier. 


China plus one was now considered a solid strategy, and countries, businesses, and even common people realised its importance. C+1 helps them mitigate risk, optimise production costs, gain market access through diversification and begin a new supply chain with resources from one country and production in another.


China is still heavily relied on by people, and continues to be a major manufacturing hub, just not the only one and definitely not one for all industries.


There is one country that benefited from all of this: India. How? It has the population for cheap labour costs, it has a larger consumer base for cheap goods and initiatives like "Make in India" have become popular.


Is India the next China? Are people willing to take the risk again? Or will India be China's number one "plus one"? 

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