Overview of Business Relocation Trends
As global supply chains are being reconfigured, more Korean companies operating overseas are relocating production bases and business sites. The US-China trade dispute, the pandemic, and geopolitical risk have accelerated the "China Plus One" strategy, making the shift from China toward Vietnam, India, and Bangladesh increasingly visible.
Based on KOTRA survey findings, this analysis reviews relocation patterns among overseas Korean companies, the main reasons behind those moves, and the profile of destination countries, while assessing where Bangladesh stands in this broader transition.
Analysis of Relocation Drivers
The five primary drivers of business relocation are labor-cost inflation, geopolitical risk, market access, tax incentives, and supply chain diversification. Rising wages remain the single largest factor, followed by mounting geopolitical uncertainty and the need to rebalance production footprints across multiple countries.
| Rank | Driver | Share | Main Origin Countries | Main Destination Countries |
|---|---|---|---|---|
| 1 | Rising labor costs | 35% | China, Vietnam | Bangladesh, Myanmar |
| 2 | Geopolitical risk | 25% | China, Russia | Vietnam, India |
| 3 | Market access | 18% | Various | India, EU |
| 4 | Tax incentives | 12% | Various | Bangladesh, Cambodia |
| 5 | Supply chain diversification | 10% | China | Vietnam, India |
Bangladesh's Position
Bangladesh is one of the net beneficiaries of global supply chain reconfiguration, with inbound relocations exceeding outbound moves. Over the past three years, 25 Korean companies shifted operations from China or Vietnam into Bangladesh, while only 8 companies relocated from Bangladesh to other countries during the same period.
Reshoring and Nearshoring Trends
| Country | Labor Cost | GSP Benefits | Infrastructure | Political Stability | Overall Attractiveness |
|---|---|---|---|---|---|
| Bangladesh | ★★★★★ | ★★★★ | ★★ | ★★★ | ★★★★ |
| Vietnam | ★★★ | ★★★ | ★★★★ | ★★★★ | ★★★★ |
| India | ★★★★ | ★★ | ★★★ | ★★★★ | ★★★★ |
| Cambodia | ★★★★ | ★★★★ | ★★ | ★★★ | ★★★ |
| Myanmar | ★★★★★ | ★★ | ★ | ★ | ★★ |
Global supply chain reconfiguration presents Bangladesh with both opportunity and risk. The country is benefiting from relocation demand originating in China, yet it could face much stronger competition from Cambodia, Myanmar, and other low-cost markets if LDC graduation erodes its GSP advantages. Korean companies already operating in Bangladesh need to reassess the foundations of their competitiveness, while firms considering new investment should make decisions with a longer-term scenario in mind, including the post-graduation trade environment.