Some factories might leave China, but in the grand scheme of things it doesn't matter much

cnbc.com:

BEIJING — China still holds the cards for global supply chains, whether or not Covid lockdowns frustrate businesses in the near term.

Companies and analysts have discussed moving factories out of China for years, especially since labor costs have climbed and U.S.-China trade tensions worsened.

The pandemic has reignited those conversations. Foreign businesses talk about how executives can easily travel to Southeast Asia factories, but not China. Some point to surging exports from Vietnam as an indicator that supply chains are leaving China.

"Supply chain diversification is quite tricky because people always talk about it, and boardrooms love to discuss it, but often at the end of the day people find it's difficult to implement," said Nick Marro, global trade leader at The Economist Intelligence Unit.

When businesses had those discussions in 2020, it turned out that «China was able to remain open, while Malaysia, Vietnam were going offline,» Marro said. «Really, the critical factor right now is how China plans on maintaining these [Covid] controls as the rest of the world opens up.»

China's so-called zero-Covid strategy of swift lockdowns helped the country quickly return to growth in 2020. However, implementation of those measures has since tightened, especially this year as China faces a resurgence of Covid in Shanghai and other parts of the country.

By the numbers, China's exports rose by 3.9% in April from a year earlier, the slowest pace since a 0.18% increase in June 2020, according to official data accessed through Wind Information.

Vietnam in contrast saw exports jump by 30.4% in April from a year ago, following a nearly 19.1% year-on-year increase in March, Wind showed.

The level of manufacturing interest in