THE SNS X-SHORING INDEX: SCORING AND BASIC METHODOLOGY
WHAT THE INDEX TELLS US
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Why Read: Reshoring operations from China is one of the biggest challenges currently facing international businesses. This week’s issue focuses on the most suitable destinations for companies looking to shift operations by examining the utilities, infrastructure, labor markets, and geopolitical outlooks of the most likely candidates for “friendshoring” or “nearshoring.”
One of the greatest economic stories of the past two decades has been the relocation of the world’s manufacturing from many nations to one: the People’s Republic of China (PRC). Between massive, systematized IP theft, human-rights abuses, erratic COVID policy, and the rise of Xi Jinping’s “Wolf Warrior” tactics, however, the PRC has become an increasing source of geopolitical, social, and economic instability.
That’s bad for business.
Thus, as tensions between China and much of the world continue to rise, companies are either pulling operations out of the East Asian nation or planning for such a contingency. For manufacturers, the biggest question is where to go next. With de-risking supply chains now top-of-mind for global businesses, the question of whether to reshore (move production back to its country of origin), nearshore (move production to a country nearer its destination), or friendshore (move production to a geopolitically friendlier nation) is not easy to answer. In these pages, we’ll analyze the factors that make a given country a better or worse candidate for placement of production, starting with the current most-popular destinations for businesses seeking to disengage from China; and we will introduce a new SNS index, offering data-based guidance on what might be called the “X-shoring” dilemma.
First, let’s examine why these countries have reached that status.
