Risk management for the trend of regional economies
Author: Gilbert Chen
The development and evolution of the democratic era has made the problem of the regime's inability to continue its policies increasingly prominent. Regimes change every four years, resulting in frequent changes in national policies. The United States led the establishment of the WTO in 1995, and the pace of globalization accelerated. The world uses a professional division of labor to achieve global and barrier-free cooperative development. Backward countries have gradually risen in the manufacturing industry because of cheap labor. The mainland has developed rapidly due to the favorable time, place and people. As a result, the four Asian tigers-Taiwan, South Korea, Hong Kong, and Singapore have become richer and more prosperous. The mainland has integrated various industries. As a result of the manufacturing base and economic reform and opening up of the direction of Deng, Xiaoping, a group of hard-working and smart local people began the first wave of innovative research and development and the CSD system that led manufacturing.
Rapid development is certainly a good thing, but when the edge is too exposed and the technology threatens the already superior Western technology, rapid development will have the opposite effect. In order to slow down the development of the mainland, the United States is rethinking its globalization strategy. Hence the demand for a regional economic model with high import tariffs. In an act that runs counter to the WTO that it advocates (the WTO now exists in name only), it has recently further banned the export of global high-end equipment to the mainland and the export of high-level mainland products to the United States.
Under the strong dominance of the United States, the world has transformed from globalization to a regional economic development model. The main manufacturing-oriented regions—Japan, Taiwan, South Korea, China, Hong Kong, and Singapore (the latter two have transformed into economic, trade and financial centers), gradually expand the central defender system in the mainland to Southeast Asia, South Asia, Central and South America, Europe, and even the United States. What impact such development trends will have on world economic changes is not the focus of this article, so I won’t go into details here. In the past globalized economy, many global companies concentrated their manufacturing bases in one or several low-cost regions, while their R&D and sales services were dispersed in suitable locations around the world. Nowadays, due to the intervention of political factors in the operation of regional economies, manufacturing centers no longer only consider costs, but also need to consider political and economic risks. Risks of national territorial disputes and power struggles. When customers think about where to place orders, they also set the above factors as key reference items.
The typical manifestation of regional economic development is that TSMC's establishment of factories around the world. Customers need to provide stable manufacturing services, but the production location must not have any uncontrollable risks. Therefore, key technology manufacturing industries will be required to have multiple production bases. When there is a risk of shipments in certain places, customers can quickly request to adjust the production base to avoid the risk of out of stock. PSI originally had three factories including Taipei and Chiayi Factory in Taiwan, and Shenzhen Factory in Mainland China to provide interactive support for production management. The production organization is the same, the computer data collection system is the same, and the production management system is exactly the same. When the customer needs to move production, the materials are directly transferred to the factory. Technical personnel will be stationed at the factory in the early stage to hand over, and the production transfer will be completed within two months of seamless integration. In 2023, in order to provide customers with peace of mind due to the political instability on both sides of the Taiwan Strait, a full-process production base in Vietnam was established in Ho Chi Minh, Vietnam, and is currently operating smoothly and normally. Customers have more flexible production options in the three locations, and can still complete the production transfer in two months. Risk management of regional economies is a subject that needs serious consideration in current market operations. PSI has complete transfer planning and execution capabilities for small-volume and diverse production, and can provide customers with the most secure supply needs and quality system requirements. Opportunities are for those who are prepared, and PSI’s risk management and control system is ready!