This article is part of a series on the New Cold War
Earlier this year, four dozen lawyers, accountants and bankers from all over Latin America piled into a conference room in an office tower on Miami Waterfront. They listened spellbound as Nicholas Chen, an energetic lawyer who had come all the way from
Taiwan, told them about an
exodus of manufacturing from China that could make them rich.
“The tsunami waters are flowing outward now,” Mr Chen said to the assembled audience.
Pointing to the
US trade war with China, he said many companies were having second thoughts about maintaining operations in the Asian country. “Huge numbers of China-located companies are shifting their purchase orders, manufacturing capacities and operations out of China,” he claimed. “This can become your El Dorado!” — a reference to the mythical gold treasure that drove generations of explorers to Latin America.
Mr Chen knows how to make a good pitch. Starting in the early 1990s, the Chinese American lawyer helped hundreds of companies from Taiwan, a hub of manufacturing for electronics and other industries, to set up shop in Suzhou — a city just outside Shanghai in Jiangsu province.
Nicholas Chen helped companies from Taiwan, a hub of manufacturing for electronics and other industries, to set up shop in Suzhou near Shanghai © Walid Berrazeg/FT
The influx made Suzhou one of the largest clusters of Taiwanese manufacturing in China, with more than 11,000 companies and cumulative investment of more than $30bn as of 2018. The companies included flat panel maker AU Optronics, telecoms gear maker Sercomm and at least 10 Apple suppliers. They were part of a force that transformed China into an export machine supplying the whole world — until now.
Those
same supply chains are now at the centre of a tug-of-war that has huge implications for the future of the global economy and for geopolitics.
Driven by President Donald Trump’s push to “decouple” the US economy from China and the disruptions caused by the
coronavirus pandemic, many manufacturers are being forced to rethink their presence in China.