NAVIGATING THE CHINA PLUS ONE PARADIGM: A COMPARATIVE STUDY OF GLOBAL MANUFACTURING REALIGNMENTS AND THEORETICAL FRAMEWORKS

Abstract

Systemic wage inflation, demographic shifts, strict environmental regulatory enforcement, and rising geopolitical frictions are eroding China\'s historical manufacturing cost advantages. Global multinational corporations are transitioning from hyper efficient just-in-time networks to resilient, just-in-case value chains through the China Plus One (C+1) strategy. To address this, this study systematically compares the structural readiness, competitive factor conditions, and strategic advantages of key emerging manufacturing hubs: Vietnam, Mexico, India, Indonesia, and Malaysia. The research integrates John Dunning’s Eclectic (OLI) Paradigm, Michael Porter’s Diamond Model, the Uppsala Internationalisation Model, and the Environmental Kuznets Curve (EKC). While China retains core Ownership (O) and Internalisation (I) advantages, declining Location (L) benefits are driving labor intensive manufacturing to lower cost alternatives. India and Vietnam lead as comprehensive friendshoring alternatives due to favorable cost to scale structures and trade architectures. However, country specific bottlenecks (e.g., Mexico\'s utility deficits, Indonesia\'s youth training gaps, and India\'s agricultural protectionism) presents critical trade-offs for corporate strategy. This paper provides an integrated theoretical roadmap for mapping global value chain (GVC) restructuring and outlines targeted policy adjustments for host countries aiming to capture foreign direct investment (FDI).