China’s era as the low-cost manufacturing center of the world is under some pressure. Over the years, profits began to reduce due to rising costs, tighter regulations, and Chinese government policies. Manufacturers have been experiencing the squeeze as China shifts its priorities from lower-end manufacturing to high technology industries as part of a broader bid to upgrade its economy. The prospect of tariffs stemming from a trade war between the United States and China, tips the scales even further.
Interviews with over a dozen manufacturers from medical device makers to agricultural equipment firms illustrate how companies exporting to the United States are now rethinking their calculations about making goods in China.
Chicago, MI-based GMM Nonstick Coatings has moved some production to India after a 30 percent dip in China orders for advanced chemicals used to coat American household kitchenware brands such as George Foreman and Baker’s Secret as those clients move some production out of China. “This tariff thing is adding friction to being in China and it’s making the decision [to shift production] quite easy for U.S. sourcing departments,” said Ravin Gandhi, GMM’s chief executive.
“China’s manufacturing sector will not vanish overnight, but a shift is inevitable,” said Dan Krassenstein, Shanghai-based director of Asia operations at ProconPacific, which produces 3 million industrial shipment bags annually. Five years ago his company made all its products in China. Now, a quarter are made in India and 5-10 percent in Vietnam. In terms of scale, China cannot be easily replaced: it has a manufacturing output of $2 trillion, the world’s largest, according to a Brookings Institution report in July.
Last updated: December 26th, 2025
