On August 10, 2026, Chinese media Guancha.cn reported on the background of the "U-turn phenomenon" in which global companies that had relocated their production bases to Southeast Asia are now returning to China.

The article introduced data from QIMA, which conducts quality inspections and audits for global supply chains, and stated that while the relocation of global companies to Southeast Asia accelerated from January to March, the share of North American customers in China rapidly recovered to 35% from April to June, and conversely, the share in Southeast Asia declined.

Furthermore, quoting a Reuters report, it introduced that China-originated apparel e-commerce giant SHEIN reduced the leased area of its logistics facilities in Vietnam from 15 hectares to 6 hectares and cut local staff, while planning to invest over 10 billion yuan (approximately 235 billion yen) in Guangzhou, Guangdong Province, to build a smart supply chain.

Moreover, citing reports from the U.S. New York Times and others, it reported that U.S. footwear giant Steve Madden, despite setting a goal to temporarily reduce its procurement ratio from China to the 10% range, re-increased it to approximately 40% in February, and that global OEM giant Genimex canceled its overseas relocation plans.

The article then pointed out that the first factor driving the return of production to China was that the economic viability associated with "China Plus One" became unfeasible due to changes in U.S. tariff policy. It stated that due to the U.S. abolishing the de minimis exemption for low-value imports (under 800 USD, or approximately 127,000 yen) for all countries, the tariff difference between Southeast Asia and China, and furthermore, costs, significantly narrowed.

As a second factor, it mentioned China's overwhelming strength in "supply chain speed and industrial agglomeration," which cannot be measured by cost alone. While introducing SHEIN's "ultra-small batch, ultra-fast" model in the rapidly changing apparel industry and the existence of industrial agglomeration areas like Guangzhou's Panyu District, it argued that in Southeast Asia, "waiting times" occur due to the need to procure parts from China, leading to inventory risks, transportation costs, and lost opportunities.

The article concluded that while it is possible to relocate factories to Southeast Asia, it is extremely difficult to relocate the entire "supply chain ecosystem," including surrounding infrastructure, clusters of parts manufacturers, skilled labor, and responsiveness, and that this is precisely China's strength. (Edited and translated by Kawajiri)