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Samsung still has strong presence in China

China Daily | Updated: 2019-10-17 08:08

Editor's Note: This month, Samsung Electronics closed its last handset factory in Huizhou, Guangdong province, which was its first plant in China. 21st Century Business Herald comments:

The closure of the Huizhou plant means Samsung now has no handset manufacturing operation in China, prompting speculation about the underlying reasons, with some saying that Sino-US trade frictions have led to Samsung's withdrawal. This argument is untrue. Samsung had already shut down its cellphone factories in China before the Sino-US trade frictions and rebuilt its manufacturing base in Vietnam. Moreover, the Huizhou plant does not export to the United States and is thus not affected by the US tariff policy.

Unlike Apple, Samsung has a homegrown supply chain and makes its core components at home, its overseas factories are largely for assembly, so it remains particularly sensitive to overseas labor costs. As wages keep rising in China, it is natural for Samsung to move to other places with cheaper labor costs. Why Apple does not withdraw from China is not that it is attracted by China's low wages, but because it has formed a mature supply chain system in China, which means if it moves its manufacturing from China, the efficiency of its supply chain and innovation advantage will disappear.

Samsung still has strong presence in China

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