China is exporting its factories across the world and spooking the competition

“Made in China” is becoming “made by China”—all over the world.

- Hannah Miao & Stephen Kalin

China's factories are moving to other countries.

Faced with higher Western tariffs and weak demand at home, many Chinese factories are moving abroad, making everything from appliances to automobiles everywhere from North and South America to Eastern Europe.

More Chinese companies could be coming to the U.S., after President Trump and Chinese leader Xi Jinping reached a deal in Beijing this month to establish a new bilateral “board of investment.”

Yet global manufacturers, especially in the U.S. and Europe, worry the Chinese businesses are bringing China’s brutal rat-race competition with them, potentially crushing local incumbents and curbing salaries.

Gotion, a Chinese battery maker, planned to build a $2.4-billion plant in Michigan, but the project is at a standstill after years of local opposition over the company’s Chinese roots. Another Chinese battery maker, CATL, has had to settle for licensing its technology to companies such as Ford, which is building a $3 billion plant in Michigan to make CATL-designed batteries.

In Brazil and Hungary, electric-vehicle seller BYD has been dogged by complaints that Chinese migrant workers hired to build its factories were subject to labor rights violations, including what Brazilian authorities called slavery-like conditions. Some European Union officials fear BYD’s new plant in Hungary could undermine carmakers across the continent, threatening an industry that accounts for 7% of EU economic output and 13 million jobs.

BYD says it stopped working with its contractor for the Brazil factory and that it has zero tolerance for violations of human rights and labor laws across its operations. It has also said its Hungary business will create thousands of jobs, boost the local economy and support local supply chains.