Putting Some Eggs in Another Basket

The China plus one strategy, or plus one, is gathering attention in the business world. Some businesspeople fear that their companies may be overconcentrating in China. So instead of putting all your eggs in the China basket, China plus one says you should consider somewhere to invest in addition to China.

Although China is attractive to many companies around the world, diversifying is always a good risk management tool. It’s especially significant for the manufacturing sector, where some multinationals have a very high concentration of investment in China. As a result, many companies are becoming more cautious about adding any future investment in China. Some big companies are considering investments elsewhere in Asia, such as Vietnam and Malaysia.

As you may appreciate, some of the multinationals have billions of dollars of investment in China. Therefore, they have a good reason to be concerned about their company’s future approach to investment in China. If you’re a smaller company, you may want to keep China plus one in mind for the future.