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Nobody else has anywhere near the capacity. Foxconn are the third largest tech company in the world, not a tinpot little outsourcing shop. Apple already use other EMS companies for reasons of cost and capacity, but they are all Chinese companies or rely on predominantly Chinese labour. Foxconn's nearest foreign competitor (Flextronics) is just a fifth of the size of Foxconn and sources most of its labour from China.

China has tremendous technical expertise and vast amounts of relatively cheap labour, which is a formidable combination. Singapore, Japan and Chinese Taipei have the expertise, but they don't have enough cheap labour. Thailand and Indonesia have plenty of cheap labour, but they don't have the expertise. China also has superb logistics, which reduces cost and improves lead times.

For the foreseeable future, China is simply unavoidable. Within just a few years, their position as the dominant manufacturing nation will be secondary to their position as the dominant consumer market.




China's cheap labor is not everything it used to be. Nearly 7x more expensive over the past two decades and expertise is everywhere. Sure it would be painful, but it isn't like China doesn't stand to also lose here as well.




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