The strategy encourages companies to minimize their supply chain dependency on China and asks them to diversify the countries they source parts from. The strategy emerged in 2013 due to concerns about global dependency on China and in the present times, the concept has become more popular due to trade wars between US-China, COVID-19 disruptions, and rising labor costs in China.

Beijing’s Zero-Covid policy after 2020, has led to continuous supply chain disruptions which made firms think to look for alternatives.

If the focus is on a single country apart from China, it is known as China+1 and if the the diversification takes place in more than one countries, it is known as China+N.

The new markets who are emerging as great alternatives to China are India, EU, Mexico, Taiwan, and Vietnam, across sectors such as machinery, automobiles, and transport and electrical equipment.

The shift to other countries depend upon various considerations such as costs of manufacturing, Labour cost, Political stability, infrastructure and more. India is working to improve all these parameters.

Officials and companies in Japan and the United States have been planning to diversify away from China as early as 2008. And this has gained more popularity due to US-China trade tensions in the present. India is a big beneficiary of this strategy.