{"id":6947,"date":"2024-03-21T21:02:59","date_gmt":"2024-03-21T21:02:59","guid":{"rendered":"https:\/\/intelligence.supplyframe.com\/?p=6947"},"modified":"2024-03-21T21:03:00","modified_gmt":"2024-03-21T21:03:00","slug":"glocalization-supply-chains","status":"publish","type":"post","link":"https:\/\/intelligence.supplyframe.com\/de\/glocalization-supply-chains\/","title":{"rendered":"How The Shift Towards \u201cGlocalization\u201d Affects Global Supply Chains"},"content":{"rendered":"<p>According to pundits, the era of globalization is not dead yet. It peaked in 2008, and since the global COVID-19 pandemic struck in 2020, it has morphed into what is being called <a href=\"https:\/\/www.investopedia.com\/terms\/g\/glocalization.asp\">\u201cglocalization.\u201d<\/a>&nbsp;<\/p>\n\n\n\n<p>It includes the elements of the free market and national self-reliance. Glocalization differs from country to country but typically means shorter supply chains and a focus on rebuilding domestic manufacturing capacity. Join us as we explore this new trend and what it means for today\u2019s electronics industry leaders.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-global-economies-face-uncertainty-in-2024-nbsp\">Global Economies Face Uncertainty in 2024&nbsp;<\/h3>\n\n\n\n<p>Most advanced countries are projecting <a href=\"https:\/\/www.imf.org\/en\/Publications\/WEO\/Issues\/2024\/01\/30\/world-economic-outlook-update-january-2024\">positive GDP growth<\/a> in 2024 and 2025 but at lower rates than growth rates over the previous two decades, which averaged 3.8%. China\u2019s growth remains weak but is expected to pick up. <a href=\"https:\/\/www.imf.org\/en\/Publications\/WEO\/Issues\/2024\/01\/30\/world-economic-outlook-update-january-2024\">US GDP growth<\/a> is forecast to slow from 2.5% in 2023 to 2.1% in 2024 and 1.7% in 2025. Global inflation is forecast to fall to 5.8% in 2024 and 4.4% in 2025. Of concern for 2024 is the risk of higher commodity prices caused by geopolitical shocks.&nbsp;<\/p>\n\n\n\n<p>China\u2019s manufacturers also face economic challenges in 2024, from the domestic housing market crisis to weak domestic consumer demand and the move towards nearshoring manufacturing. As a result, one forecaster revised <a href=\"https:\/\/www.automation.com\/en-us\/articles\/february-2024\/triple-challenge-china-manufacturing-industry-2024#:~:text=However%2C%20growth%20still%20remains%20weak,to%20pick%20up%20from%202025.\">China\u2019s Manufacturing Industry Output (MIO) growth downward<\/a> from 3.0% to 2.6% in 2024, indicating weak growth. The good news is that China\u2019s manufacturing industry will grow in 2025.<\/p>\n\n\n\n<p>The shortage of semiconductors and the weakness of China\u2019s semiconductor industry are bottlenecks for the rapid growth of high-tech manufacturing over the medium and long term. The U.S. export restrictions on Chinese companies have created challenges for purchasing powerful, cutting-edge semiconductors, preventing the U.S. from rapidly developing applications from new technologies, such as artificial intelligence (AI).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-effects-of-reshoring-and-nearshoring-nbsp\">The Effects of Reshoring and Nearshoring&nbsp;<\/h3>\n\n\n\n<p>A critical question on many manufacturers\u2019 priority lists is whether the low level of economic growth is here to stay due to the maturation of the Chinese economy or if other countries, including the U.S., may introduce measures to re-shore manufacturing.&nbsp;<\/p>\n\n\n\n<p>As indicated by the slowing of China\u2019s population growth, its economy is forecast to slow down and match other more mature states rapidly. The previous high growth driven by labor-intensive manufacturing is not sustainable.&nbsp;<\/p>\n\n\n\n<p>Reshoring initiatives introduced by the U.S. may also accelerate the shift. Still, trade conflicts and nearshoring to the neighboring Asian countries will likely harm China\u2019s manufacturers in the short term.<\/p>\n\n\n\n<p>China\u2019s manufactured product inventory was close to bottoming out at the end of 2023. In early 2024, the capacity utilization rate picked up. Still, China\u2019s manufacturers expect to face ongoing challenges soon, including a housing market crisis, weak domestic consumer demand, and a shift to nearshoring manufacturing to lower-cost countries.<\/p>\n\n\n\n<p>China\u2019s housing market downturn has affected China\u2019s manufacturing industries, including the aggregates, metal, and machinery sectors. The decline in real estate prices and the expected drop in consumer consumption impacts demand for consumer goods.<\/p>\n\n\n\n<p>Throughout 2023, exports have performed worse than domestic demand, placing pressure on China\u2019s manufacturing economy. Domestic consumption and investment in China increased by 7.2 and 3.0%, respectively, year-on-year. In comparison, the value of exports decreased by 4.6% in 2023, partly due to a significant decline in demand from Western markets.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-growth-on-the-horizon-nbsp\">Growth on the Horizon&nbsp;<\/h3>\n\n\n\n<p>In 2024, as the global economy faces a downturn, exports are expected to negatively impact manufacturing output growth in China. However, currency depreciation caused by expected interest rate cuts by China\u2019s Central Bank may offset some of this decline.<\/p>\n\n\n\n<p>Nearshoring to Southeast Asia will continue to impact the growth and structure of China\u2019s manufacturing industry. Decreasing margins in 2023 have accelerated Chinese manufacturers\u2019 decisions to move production to lower-cost locations. For over a decade, textile production and electronics assembly has substantially moved from China to Vietnam and Indonesia.&nbsp;<\/p>\n\n\n\n<p>In recent years, we have also seen Chinese automotive manufacturers setting up factories in Thailand, including both traditional automakers and manufacturers of electric vehicles. Relocation is an inevitable result of China\u2019s manufacturing shift upstream in the value chain, and in the long term, it helps Chinese manufacturers move towards advanced manufacturing.<\/p>\n\n\n\n<p>In 2024, China plans to focus on increasing government investments in new infrastructure such as the digital economy, Internet of Things, and other technologies supporting hi-tech manufacturing and creating the right business environment for private sector growth. With strong political support, we expect confidence and domestic demand in China to recover ahead of the real estate cycle.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-stay-ahead-of-the-curve-with-intelligence-for-what-s-next-nbsp\">Stay Ahead of the Curve With Intelligence For What\u2019s Next&nbsp;<\/h3>\n\n\n\n<p>Various geopolitical and economic factors, including the ongoing trend of Glocalization, have sweeping effects on global supply chains that translate to changes in component cost, availability, lead times, and other risk factors. Supplyframe Commodity IQ gives your teams the intelligence and insights they need to make smarter, more profitable sourcing decisions.\u00a0<\/p>\n\n\n\n<p>Learn more and discover how <a href=\"https:\/\/supplyframe.com\/commodity-iq\">Commodity IQ<\/a> keeps your teams ahead of the curve today!&nbsp;&nbsp;&nbsp;&nbsp;<\/p>","protected":false},"excerpt":{"rendered":"<p>According to pundits, the era of globalization is not dead yet. It peaked in 2008, and since the global COVID-19 pandemic struck in 2020, it has morphed into what is being called \u201cglocalization.\u201d&nbsp; It includes the elements of the free market and national self-reliance. Glocalization differs from country to country but typically means shorter supply [&hellip;]<\/p>","protected":false},"author":36,"featured_media":6948,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[220,9,11,102],"tags":[184,47,129,70,77],"class_list":["post-6947","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commodity-iq","category-digital-transformation","category-featured","category-resources","tag-commodity-iq","tag-industry-news","tag-industry-trends","tag-semiconductors","tag-supply-chain"],"blocksy_meta":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.3 (Yoast SEO v25.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Exploring the rise of &quot;Glocalization&quot; in Electronics Supply Chains<\/title>\n<meta name=\"description\" content=\"As globalization has given way to &quot;glocalization,&quot; we examine how new shifts in 2024 will inform changes to electronics supply chains.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/intelligence.supplyframe.com\/de\/glocalization-supply-chains\/\" \/>\n<meta property=\"og:locale\" content=\"de_DE\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How The Shift Towards \u201cGlocalization\u201d Affects Global Supply Chains\" \/>\n<meta property=\"og:description\" content=\"As globalization has given way to &quot;glocalization,&quot; we examine how new shifts in 2024 will inform changes to electronics supply chains.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/intelligence.supplyframe.com\/de\/glocalization-supply-chains\/\" \/>\n<meta property=\"og:site_name\" content=\"Supplyframe\" \/>\n<meta property=\"article:publisher\" 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