Sino US trade friction and relocation of precision parts processing industry

In recent years, Chinese CNC lathe processing enterprises have gone to Southeast Asia to set up precision parts processing plants. This trend is most obvious in 2020, which is also the impact of Sino US trade friction on precision parts processing industry. Many precision parts processing enterprises that undertake orders from the United States will add one tenth or even more taxes once they enter the trade control list.

Many countries in Southeast Asia have achieved the market economy status recognized by the United States. The products operated by many Shenzhen CNC processing manufacturers were once listed in the sanctions list caused by the Sino US trade war. For such precision parts processing plants, building precision machinery processing plants in Southeast Asia to bypass trade barriers has become the most preferred choice.

In addition to the impact of Sino US trade disputes that have not yet been resolved, the US anti-dumping policy on precision parts processing is also a sharp sword hanging over these precision parts processing plants. If the Sino US trade friction becomes a long-term trend and China's precision parts processing industry spills out to Southeast Asian countries, if this process is short and concentrated, it will lead to the price rise of labor, land and raw materials. Due to the lack of capacity reserves, the order delivery is not timely, and the quality of precision parts processing can not be guaranteed. Therefore, in the short term, Southeast Asia can only undertake the low-end part of precision parts processing. And these countries are not deep enough to accommodate too much volume.

From non-standard processing, aluminum products processing, aluminum parts processing, stainless steel processing to sheet metal processing, only China has such a mature industrial chain, and a key factor for China to retain the precision parts processing industrial chain is China's own market scale. Therefore, the construction of precision parts processing plants in Southeast Asia must be based on the sales expectation of precision parts processing products in the local market, rather than just for the purpose of reducing labor and land costs.