HP, Dell, Microsoft, Alphabet and Amazon want to extract production from China

Several large American companies – including HP, Dell, Microsoft, Alphabet and Amazon – want to source a large part of their production from China. The cause is the trade war between Washington and Beijing.

Plans for the relocation of production were reported to Nikkei by sources. How much of the production has to go to other countries varies from one company to another. For example, computer manufacturers HP and Dell would like to get 30 percent of their laptop production from China.

Microsoft, Alphabet, Amazon, Sony and Nintendo in turn want to take some of the production of game consoles and smart speakers out of the country. Other leading PC makers such as Lenovo, Acer and Asustek Computer are considering similar plans.

Trade War

The plans are the result of a trade war between the US and China. Last weekend at the G20, President Donald Trump and President Xi Jinping reached a ceasefire.

However, this has not changed the plans of tech companies. Various sources state that the situation is still too uncertain. In addition, costs are rising in China, allowing manufacturers to look at other options.

The plans will follow after other tech companies have made similar choices. For example, Apple is investigating the costs of moving 30 percent of its smartphone production. Manufacturers of servers, network products and key components also get their production from China, often at the request of American customers.

Hit for China

If the companies decide to produce more in other countries, that would be a blow to China. The export of electronics has been the biggest driver of growth in the country for many years. China is the largest producer of PCs and smartphones.

As a result, there are concerns in China about the loss of jobs and a halt to economic growth in the country. This growth is already the slowest since 1990.

But the relocation of production can also have consequences for the US. This is because the products may become more expensive, which means that consumers and companies that buy components will notice.