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Trump trade policies driving Hong Kong industry’s ‘China plus N’ shift: study

Industry federation report suggests 70 per cent of members have been diversifying production beyond China amid geopolitical volatility

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A report by the Federation of Hong Kong Industries has suggested that about 70 per cent of its members are already diversifying production beyong mainland China as a calculated strategy against geopolitical volatility. Photo: Eugene Lee

Hong Kong’s industrial sector is increasingly adopting a “China plus N” strategy as a primary defence against unpredictable United States trade policies, with about 70 per cent of its members already operating in, or moving to, Southeast Asia, according to a report.

Steve Chuang Tzu-hsiung, chairman of the Federation of Hong Kong Industries, said on Tuesday that this strategy was a calculated hedge against geopolitical volatility that had been years in the making.

“You don’t know which madness [US President Donald] Trump will have tomorrow,” Chuang said. “It could be 20 per cent in Vietnam or it could change tomorrow, so we have already done our homework.”

Chuang clarified that the 70 per cent diversification figure was derived from a survey conducted among the federation’s members late last year.

The “China plus N” strategy involves diversifying production and supply chains to multiple locations beyond mainland China, aiming to mitigate geopolitical and economic risks concentrated in a single country.

The proactive diversification into the Association of Southeast Asian Nations (Asean) bloc is a direct response to years of tariff uncertainty.

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