Will Western factories move from Asia to Poland?

Security of supply has again become important. A pandemic can be a lesson for large corporations that it is better to invest close to outlets.

Once the virus is mastered, the previously underestimated factor may gain – physical proximity of suppliers, enabling stable production regardless of events in remote corners of the globe. This is not only about the risk of a lack of supply, but also about the fact that the crisis caused by COVID-19 may cause even more pressure to protect our economies through tariffs and quotas for external entities.

In this situation, after controlling the pandemic, the countries of our region could benefit. Despite rising earnings, production is still more profitable here than in the West. Belonging to the common European market and the Schengen area is an advantage in terms of logistics.

Whether global players will actually start looking more favorably at markets closer to each other can be seen using the example of the automotive industry. Even before the coronavirus began to spread in Europe, factories on the Old Continent had supply problems due to the lack of parts from China – the largest automotive manufacturer in the world.

A few years ago, the industry got into the Chinese market as a cheap supplier of many components. It is now clear that shortening and diversifying the supply chain may be more important for European companies. Poland is very close to all major concerns operating on the continent, and Polish companies already service many of them. Now is the chance to develop this cooperation. Other countries of the region could also benefit from such a situation – e.g. the Czech Republic or Slovakia.

Powerful production capacity will continue to speak in favor of China. The People’s Republic of China will maintain its position even if no one else is able to contract such large volumes, what automatically reduces the price. The local authorities will not release from the hands the most profitable branches, such as the production of electronic devices and computers. In this sector, the know-how and technological facilities that China has been building consistently for many years are very important.