Where To Source Products Outside Of China // Pros And Cons Of Top China Manufacturing Alternatives
For decades, China has been at the heart of global manufacturing, celebrated for its vast supplier networks, cost efficiency, and large-scale production. However, the landscape is changing rapidly: with ongoing trade wars, new tariffs, and heightened geopolitical tensions in 2025, more businesses than ever are reevaluating their reliance on China and actively seeking alternative sourcing destinations. Diversification has become a top priority for companies, as they aim to safeguard their supply chains, mitigate risks from tariffs and political uncertainty, and capitalize on opportunities in emerging markets.
This article uncovers the best countries outside of China for product sourcing in the wake of these shifts. From Vietnam’s booming electronics and garment sector—exporting over $44 billion in textiles and nearly $130 billion in electronics in 2024—to Mexico’s world-class automotive and appliance manufacturing, and India’s ascent as a leader in textiles, chemicals, and technology, these countries are quickly becoming essential links in global supply chains. Other rising stars, like Bangladesh in apparel and Turkey in home goods, offer competitive advantages shaped by labor costs, free trade agreements, and improving infrastructure.
We’ll break down the unique strengths of each alternative, exploring labor markets, manufacturing expertise, export infrastructure, and the best product categories for each location. You’ll get up-to-date insights into which products to source where—and why—as well as tips for navigating the practicalities of building new supplier relationships in these emerging hubs.
Join us as we map out today’s most promising sourcing destinations beyond China. In a world shaped by tariffs and trade disputes, understanding your options is critical to building a resilient, agile, and future-proof supply chain. This guide will give you the strategic perspective you need to diversify with confidence in 2025 and beyond.
Where is the next World Sourcing Hub?
People ask, “What is the next China?” as the world continues to change. The top contenders for production outside of China are countries such as India, Vietnam, Bangladesh, Indonesia, and Thailand. This guide will focus on the main alternatives to China and the pros and cons of abandoning China in favor of emerging manufacturing centers.
Pros And Cons Of China Manufacturing Alternatives
Sourcing outside of China presents both opportunities and challenges. We wrote a blog post about key differences when sourcing outside of China. Buyers need to set realistic expectations in advance. We review the benefits and drawbacks of relocating your manufacturing and sourcing operations outside of China.
Pros Of Manufacturing Outside Of China
The primary advantage of relocating manufacturing to rising centers in Asia is to lower costs and avoid tariffs imposed on Chinese goods. While many manufacturers could cope with rising wages in Chinese cities, the new import tariffs under the Trump administration made importing goods from China expensive.
The tariffs led to thousands of manufacturers canceling their contracts in China and relocating factories to countries like Vietnam. Many of these countries can manufacture goods of similar quality at a lower production cost. Here are the main pros of outsourcing outside of China:
Lower Production Cost
Chinese factories are now more affordable than they were in the past. Some estimates claim the average wage doubles every five years in proximity to major cities. While it’s possible to keep costs low by moving the factory to a more rural area in China, most manufacturers opt for other countries where they can operate near urban centers with logistical infrastructure. As a result, although wages in other Asian countries rise, they are still significantly lower.
Less Red Tape
You must contend with substantial import taxes and restrictions imposed by the Chinese Communist Party. The CCP imposes many regulations regarding production within its borders and favors Chinese citizens in disputes. You may have to deal with a lot of red tape depending on your product. The regulations are lower in neighboring countries.
Productive Workforce
Neighboring countries, such as Vietnam and the Philippines, can provide a significant labor force at all levels. They’re competent enough to fill jobs requiring a high level of expertise, so many of them can compete with Chinese workers. The only downside is that they don’t have a large population of China with a near-unlimited labor force.
Cons Of Manufacturing Outside Of China
Limited Supply Chains.
China has approximately 2,800,000 factories operating on its soil, which manufacture a wide variety of goods. The large number of factories enables manufacturers to quickly source the materials they need from a nearby facility without importing them from a foreign country. With its limited capacity, Vietnam lacks a robust supply chain that can source materials for manufacturers. As a result of the smaller supply chain in most countries, they’ll have to import the goods from a foreign country. In some cases, this can increase production costs because you’ll have to pay extra for shipping to bring the materials to the country.
Longer Lead Time
Alternative Asian countries have limited supply chains, which means you’ll have to wait longer for the raw materials to arrive and for the product to be produced. For example, if you have to import textiles from China to your Bangladeshi factory, this may delay production by two weeks. In China, the process is faster, and shipping often takes longer than manufacturing the product. Unless the manufacturer can source all materials locally, prepare for longer lead times.
Shipping Logistics
Chinese shipping logistics are the largest in Asia and have the most extensive network of shipping companies that manufacturers can negotiate with. In countries like India, the shipping infrastructure is significantly underdeveloped. As a result, you may be stuck with very few shipping options. The shipments can take 2x as long to arrive from Indian ports as they would from Chinese ports. If the average shipping time from Shanghai port to the West Coast is 20 days, it may take up to 40 days to reach the coast if the shipment departs from Mumbai.
Higher Theft Risk
Theft isn’t a significant problem in more advanced countries like South Korea or Vietnam. Still, it is a big issue in places like Bangladesh or Pakistan. Due to a lack of shipping infrastructure in many alternative countries, certain manufacturers report that shipping containers are stolen or disappear, only to be lost and never found again. Outsourcing outside of China carries significant risks, especially when outsourcing to less-developed countries. You may have to assign security teams for your shipping.
Difficult to search for Suppliers
Sourcing in China is relatively easy, as the country offers services such as Alibaba and Global Sources. While no single alternative covers the world, many countries have a few similar websites. We compiled over 50 Alibaba alternatives and best sourcing websites to Find Suppliers Outside of China.
| Country | Key Industries | Labor Cost | Ease of Doing Business | Infrastructure Quality |
|---|---|---|---|---|
| Vietnam | Textiles, Electronics, Furniture | Low | Moderate | Developing |
| India | Textiles, Pharmaceuticals, IT | Low to Moderate | Improving | Moderate |
| Bangladesh | Textiles, Garments | Low | Moderate | Developing |
| Mexico | Automotive, Electronics | Moderate | Good | Good |
| Indonesia | Textiles, Footwear, Palm Oil | Low | Improving | Developing |
Top 5 Alternatives To China Sourcing and Manufacturing
Many “upcoming” countries promise to be the next China, but they all have advantages and downsides to consider. The countries mentioned below have less red tape and lower manufacturing costs than China. They’re a worthy contender if you plan to move your Chinese factory: 50+ Alibaba Alternatives // Best Sourcing Websites to Find Suppliers Outside China.
01 // Vietnam Sourcing
Check out How to Find Vietnam Manufacturing Companies // Sourcing Products in Vietnam.
Vietnam is the top destination for manufacturers relocating from China, thanks to its semi-developed infrastructure, lower manufacturing costs, and proximity to China. The main advantage of geography is its easy access to Chinese raw materials. At the same time, the country is positioned favorably in the ocean for direct shipping to the US.
Vietnam is a rapidly growing country that is investing heavily in high-tech manufacturing and experiencing stable economic growth. It has a stable society without significant conflicts and can produce goods of the same quality as those in China. The primary disadvantage is the country's small size, which restricts its production potential.
02 // India Sourcing
Check out: What Products Are Made In India? // Sourcing and Manufacturing in India Guide
India is attempting to supplant China as the world's central manufacturing hub, and the new government is promoting a “Made in India” program to attract new manufacturing companies to the country. The advantage of India is that it’s similar in size to China, with over 1 billion residents, allowing manufacturers to draw from an extensive pool of skilled and unskilled labor.
The population of India also guarantees companies will be able to draw materials internally, and the supply chain won’t be compromised even in times of shortages. In addition, India is a hub for technology and is well-suited for developing hardware and electronics. The main disadvantage of India is that its infrastructure is not as developed as China’s, and they have fewer options regarding shipping. When shipped from India, the goods also take longer to arrive in the US.
03 // Thailand Sourcing
Check out: What Products Are Made In Thailand? // Sourcing and Manufacturing in Thailand
Thailand has long been a manufacturing hub in Southeast Asia, and it’s known for its high-tech manufacturing, attracting significant investments from China. In addition, Thailand is attractive due to its status as a tourist destination, its safety, and its developed infrastructure.
The Thai government makes a solid effort to improve education in the country, creating a surplus of skilled labor that can participate in manufacturing. However, the main downside is that Thailand experiences yearly natural disasters, often caused by hurricanes, which can hinder production if the supply chain is disrupted.
04 // Bangladesh Sourcing
Check out: What Products Are Made In Bangladesh? // Bangladesh Manufacturing and Sourcing
Bangladesh is the world’s largest manufacturing hub for fashion outside of China, making it an ideal location for manufacturing all forms of fashion, including clothing and footwear. In addition, the Bangladeshi textile industry is experiencing growth, and many of the world’s largest brands are outsourcing manufacturing there instead of in China. Therefore, Bangladesh should be a top contender for all investments in the textile and fashion industries.
05 // Indonesia Sourcing
Check out: What Products are Made In Indonesia? // Indonesia Sourcing and Manufacturing Guide
Indonesia presents an investment opportunity due to its sheer size. With over 240 million residents, it’s currently Asia’s third most populous country, behind only China and India. Additionally, the country's low labor costs attract investors, and numerous new manufacturing plants are emerging. However, the main disadvantage is the geography, as Indonesia has several large islands that face infrastructural challenges.
Final Thoughts on Leaving China for Manufacturing
Leaving China is not a step that buyers and procurement managers can take easily, and moving manufacturing out of China requires careful planning and consideration. Knowing what product you are looking for and what country is most suitable. Explore our guide on which countries are best suited for producing specific products.
When running a business, it is essential to monitor and improve one's supply chain continually. Additionally, relocating to a new country can be a great way to improve cost or quality. We hope you found this helpful guide. Please do not hesitate to contact us if you have any questions or comments.
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