GoPro is reported to start shifting its manufacturing of its action cameras out of China in order to mitigate the impacts of the US-China trade war. GoPro is the first brand-name device maker to pull production out of China after Trump began to impose tariffs on US import from China. China has been the world’s largest electronics manufacturer, and China is also a critical market for electronics as well.
The US and China are both so important markets for all multinational corporations that no large companies afford losing either country’s market. They have to find a way to operate in both countries with a minimum impact from the tension between these two countries. GoPro is moving most of its US bound camera production out of China. This strategy is very likely to be copied by other companies. Since China has comparative advantages of production costs and technology, most export production when exports are not exported to the US will remain in China. China has more skilled and experienced labours and better equipments because China has been the world manaufactory for a significant period of time. Moreover, only when the global economy, including the Chinese economy, is performing very well, companies will consider to move their production to other places, because opening new plants will cost a lot of money and when the economy is not performing well, the labour cost will not be a big concern since the wage level can be set lower when the economic performance is poor.
Overall, companies are likely to move US bound production out of China, but other production is highly likely to remain in China, unless there are other trade policy changes.
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