Foxconn Exit Deepens Crisis in China’s Manufacturing Sector

The sudden closure of Foxconn’s Henyang Hong Fujin Precision Industry plant on September 30, 2025, has sent shockwaves through central China’s industrial belt, exposing the growing vulnerabilities in the country’s manufacturing sector.

The factory, once employing nearly 30,000 workers and serving as a key pillar of the local economy, now stands deserted. Its abrupt shutdown reflects a deeper crisis marked by corruption, unpredictable governance, and declining investor trust, according to a report by Daily Mirror Online .

For decades, China built its reputation as the “world’s factory” by offering cheap labour and strong state-backed infrastructure that attracted multinational companies, including Foxconn, Apple’s largest supplier. At its peak, the company contributed more than 80 per cent of Zhengzhou’s exports and nearly half of Henan province’s export volume.

However, Foxconn’s recent shift of manufacturing operations to Vietnam and India has left a severe economic impact. In early 2024, Henan’s mobile phone exports fell by 60 per cent, and the province’s overall trade dropped by almost 25 per cent. Several once-thriving industrial towns have since turned into near “ghost cities”, with thousands of displaced workers relying on unstable gig-based jobs.

While some analysts point to weakened global demand, others highlight China’s rigid regulations, rising operational costs, and the continuing effects of the US–China trade war as major triggers behind the corporate exodus. Increasing apprehension among global companies especially Apple over China’s tightening regulatory environment has further accelerated the shift. Countries such as Vietnam and India, known for greater policy stability and transparency, are now emerging as more attractive manufacturing destinations.

The exit has particularly affected Chinese labourers. Despite long-standing criticism over its labour practices, Foxconn was seen as more dependable than the smaller, unregulated “black factories” that dominate many industrial regions. These workplaces, plagued by wage theft, unsafe conditions, and widespread exploitation, have thrived amid weak oversight and corruption.

As more multinational companies scale back or relocate, the sheen of China’s once-celebrated economic rise is beginning to fade. Observers note that the Chinese Communist Party’s centralised control and its reluctance to reform governance structures have intensified uncertainties, leaving millions of workers without long-term security or prospects for stability.