Many OEM companies are actively exploring the China Plus One Strategy as global supply chain risks increase, labor costs shift, and geopolitical uncertainty affects long-term manufacturing planning.
However, in real-world electronics manufacturing, the Plus One Strategy rarely replaces China. Instead, it restructures how global production is distributed.
This article explains why China still plays a critical role in most OEM supply chains, especially in PCBA and industrial electronics manufacturing.
The China Plus One Strategy is a global sourcing model where companies maintain manufacturing in China while establishing an additional production base in countries such as Vietnam, Mexico, India, or Eastern Europe.
The purpose is not replacement, but diversification of manufacturing risk.
In practice, most companies implementing a China Plus One Strategy still rely on China for:
A common misunderstanding is that the China Plus One Strategy is a relocation strategy.
In reality, most OEM companies adopt a hybrid manufacturing structure:
Even companies with mature global diversification models still rely on China for stability and scalability.
One of the biggest underestimated challenges in the China Plus One Strategy is supply chain fragmentation.
A typical OEM electronic product includes multiple interconnected layers:
While assembly can be relocated, upstream supply chains remain highly concentrated in China due to:
Many companies assume manufacturing relocation is primarily a logistics decision.
However, engineering capability is often the most difficult element to replicate outside China.
Critical engineering functions include:
A successful China Plus One Strategy requires rebuilding this engineering layer, not just moving assembly lines.
👉 Related internal capability:
PCBA Assembly Services
Despite global diversification strategies, China remains central due to structural advantages:
China provides the fastest access to a dense and complete electronic component supply chain.
China hosts the largest SMT and PCB assembly capacity globally.
Engineering expertise focused on production efficiency and yield improvement is widely available.
From PCB fabrication to final assembly, processes are tightly connected.
👉 External reference (standards & manufacturing context):
https://www.iso.org/standards.html
👉 Internal capability overview:
https://www.fumaxtech.com/ems-services/
A China Plus One Strategy is effective when driven by real operational needs rather than trend-based decisions:
In these cases, diversification complements China rather than replacing it.
Most successful OEM companies follow a phased approach:
This structure ensures operational stability under a China Plus One Strategy.
Even when companies plan diversification, they often encounter practical constraints:
👉 External industry reference:
https://www.smta.org/
(Surface Mount Technology Association – manufacturing and process insights)
OEM companies should carefully evaluate:
For most OEM companies, the China Plus One Strategy is not a replacement model but a structural diversification approach.
China remains essential due to its unmatched electronics manufacturing ecosystem, particularly in PCBA production, engineering support, and supply chain integration.
A realistic global manufacturing strategy focuses on balancing resilience with capability rather than attempting full relocation.
