Quick Answer
China plus one, as defined by English Wikipedia, is the strategy of avoiding investing only in China or sourcing only from China by diversifying business into other countries; the concept dates back to around 2008. Common reasons are rising operating costs, risk diversification and access to new markets; common alternatives include India, Vietnam, Thailand, Indonesia, Malaysia and the Philippines. The key to supply chain diversification is not “switching countries” but building evaluation, quality and document management for suppliers in several countries, and planning origin and logistics lawfully.
Why Diversify Your Supply Chain?
| Reason | Explanation |
|---|---|
| Cost | Rising operating costs prompt a look at labor and production costs elsewhere |
| Risk | Avoid supply disruption from one country’s policies, logistics or emergencies |
| Market | Producing in a new country can also open its local market |
| Tariffs and trade policy | Plan supply routes around trade agreements (always lawfully) |
5 Steps to Diversify
- Map current supply: which items depend on a single country or supplier?
- Assess alternative countries: cost, industrial clusters, logistics, regulations, trade agreements.
- Find and verify suppliers: samples, factory audits, trial orders; see Finding and Evaluating Overseas Suppliers.
- Run in parallel: give new suppliers part of the orders first, then scale once stable.
- Build management systems: unified specifications, inspection standards, documents and performance reviews.
Compliance: Origin Cannot Be “Laundered”
Diversification must mean genuinely producing in the new country, not transshipping and repackaging goods to relabel their origin. Origin is determined by rules such as substantial transformation. Since 7 May 2025, Taiwan has required a declaration of origin for Taiwan-made goods exported to the US, and the Ministry of Economic Affairs has penalized many false-origin cases; see What Happens If You Use Transshipment to Evade Tariffs? and How to Get a Certificate of Origin in Taiwan.
How to Manage Multi-Country Suppliers
- Single point of contact: a sourcing agent or trader coordinates suppliers across countries, cutting communication costs.
- Multilateral trade: factories in each country ship directly to the market while the trader manages payments and contracts; see What Is Multilateral Trade?
- Consistent documents: each country’s certificate of origin, invoices and origin marking must reflect where the goods were actually made.
How Tang Sugar Can Help
Tang Sugar’s international sourcing agent service plans systematic procurement processes and alternative supply options to improve stability; our triangular and multilateral trade service plans optimal supply routes within the law, based on each country’s trade agreements and origin rules. Contact us.
FAQ
What is China plus one?
A strategy of avoiding investing or sourcing only in China by spreading business to other countries; the concept dates back to around 2008.
Which countries are common China plus one alternatives?
According to English Wikipedia, common ones include India, Vietnam, Thailand, Indonesia, Malaysia and the Philippines.
Can transshipment be used to change origin when diversifying?
No. Origin is determined by rules such as substantial transformation; transshipment and repackaging don’t change it, and relabeling origin is illegal.
How do you manage suppliers in several countries?
Unify specifications and inspection standards, set up performance reviews, and consider a sourcing agent or trader to coordinate them.
Further Reading
Sources
- Wikipedia: China plus one
- Central News Agency (2025-04-25): Taiwan-made exports to the US require a declaration from 7 May (in Chinese)
- Commercial Times (2026-09-07): 257 false-origin cases for US exports penalized (in Chinese)
