Time to Look for Supply-Chain Life Beyond China
First the trade war, now the coronavirus. Japan’s machinery makers show why the world needs a bigger shop floor.
Companies are finding it harder to improvise.
Photographer: VCG/Getty
Just as the trade war gloom that weighed on Japan’s machinery makers was lifting, the coronavirus struck. Now what? Any answer must account for the new reality: Supply chains in China are increasingly unstable.
A real recovery had been afoot. A closely watched indicator of the capital expenditure cycle, machine tool orders rose 10% in December from November, when they’d hit a multi-year low. Machinery that helps make 5G equipment and electric car parts has been top of investors’ minds, with the stock prices of companies supplying these components rising over the last year, despite lower earnings.