Do I need to move production out of China to implement China+1?

No. The whole point of China+1 is that you keep your primary or strategic production in China while adding a second source in another country. The +1 is diversification, not replacement. Companies that interpret it as an exit strategy often find themselves rebuilding capabilities they already had in China.

How do I handle tooling when splitting production between two countries?

Dual sourcing requires either duplicating tooling (investing in a second set for the +1 supplier) or verifying that both suppliers can produce equivalent parts with their own tooling. Tooling duplication is a real cost that should be factored into the diversification business case.

What percentage of orders should I move to the +1 country?

There is no universal answer, but I generally see effective splits in the 20-40% range for the +1 supplier. Below 15-20%, the +1 supplier cannot run efficiently enough to be cost-competitive. Above 50%, you are essentially switching primary sources rather than diversifying.

Can my existing Chinese supplier help set up production in another country?

Some larger Chinese manufacturers have their own facilities or partnerships in Vietnam, Cambodia, or other countries and can support a coordinated dual-base strategy. This can simplify communication and quality management. It is worth asking your current supplier about their multi-country capabilities.

How long does a China+1 transition take?

For simple, high-volume parts, qualification of a second source can take 3-6 months including tooling, samples, FAI/PPAP, and initial production runs. For more complex parts, expect 6-12 months. A full multi-family diversification program typically runs 12-24 months.

China+1 Done Right: How to Split Orders Between Countries

China+1 is not about leaving China

I talk to a lot of procurement teams that interpret China+1 as a plan to exit China. That is a fundamental misunderstanding. China+1 means maintaining your Chinese supply base while adding production capacity in at least one other country to diversify risk. The +1 is a hedge, not a replacement.

The drivers behind China+1 are real: tariff uncertainty, geopolitical risk, pandemic-era supply chain disruption memories, and pressure from leadership to show diversification. But executing it poorly costs money, introduces quality problems, and can damage supplier relationships in both countries. I have seen companies burn six or seven figures on botched dual-sourcing attempts.

What to keep in China

The first question in a China+1 strategy is not what to move. It is what to absolutely keep in China.

Complex precision parts with tight tolerances (below +/-0.02mm on critical dimensions) requiring multi-process coordination: the ecosystem density around heat treatment, surface finishing, and metrology in Chinese CNC clusters is unmatched in most alternative destinations.
Low-volume, high-mix production: Chinese shops serving export markets are built for small batches, quick setups, and flexible scheduling. Alternative locations often prefer higher volumes and longer runs.
Parts using exotic materials or specialty alloys: the breadth of certified material stock in China is wider than in any other low-cost manufacturing base in my experience.
New product introduction and prototyping: the rapid iteration cycle, fast material access, and engineering responsiveness of Chinese shops is a major advantage during the NPI phase.
Parts requiring specialized surface finishes or processes: hard anodizing, electropolishing, PVD coating, vacuum heat treat, and similar specialized processes have far more vendor options in Chinese industrial clusters.

What makes sense to move to a +1 country

Not everything should stay in China. Some categories of parts are genuinely good candidates for a second source:

Simple, high-volume parts with forgiving tolerances: fasteners, simple brackets, basic shafts, spacers, and standard components where labor content is high and precision requirements are moderate.
Labor-intensive assembly or sub-assembly work: where the value added is primarily in assembly rather than precision machining.
Parts where tariff treatment materially changes landed cost: certain product categories where preferential tariffs from Vietnam, India, or Mexico close the cost gap.
Mature, stable designs that have been in production for years with locked-down process documentation: these are the lowest-risk parts to move because the manufacturing process is proven and well-documented.
Parts with extremely high annual volume where even small per-unit savings add up to significant numbers.

Practical approaches to splitting orders

There are several ways to structure a China+1 arrangement, and the right one depends on your volume, risk tolerance, and part complexity.

Dual sourcing for the same part: Qualify a second source in another country for the same part number, then split orders between them (for example, 70/30 or 60/40). This provides true redundancy but requires double the tooling investment, double the qualification effort, and ongoing management of two suppliers.
Split by part family: Keep complex part families in China and move simpler families to a +1 country. This avoids the overhead of dual-qualifying the same part number while still diversifying your spend across countries.
Phased transition: Start with the simplest, highest-volume parts as pilots in the +1 country, learn the process, and expand over time. Do not attempt to move everything at once.
New product dual-tracking: For new products, introduce them with two sources from the start - one in China and one in a +1 country. This is easier than moving an existing part because you build dual production into the NPI process.

The risks of doing China+1 badly

I have seen enough failed diversification attempts to catalog the recurring failure modes:

Moving complex parts too early: Parts with tight tolerances or multi-process requirements are the worst candidates for a first +1 project. Start simple and build confidence.
Underestimating qualification cost: Tooling duplication, PPAP or FAI on a second source, process validation, and travel for audits all cost money. The savings from diversification need to exceed these costs over a reasonable horizon.
Starving the +1 supplier: Giving a second source only 10% of volume with inconsistent order patterns makes them uncompetitive (they cannot optimize setups) and unmotivated (you are a low-priority customer). If you dual-source, commit enough volume to make both suppliers viable.
Assuming identical quality: The same drawing produced in two different countries with different operators, tooling, and process flows will not produce identical parts. Plan for a qualification period with tighter inspection.
Damaging the Chinese supplier relationship: If your primary Chinese supplier sees you moving work out without communication, they may deprioritize your orders or reduce service levels. Transparent communication about diversification as a risk management strategy helps preserve the partnership.

Bottom line

China+1 is a risk management strategy, not a cost reduction strategy. Done right, it provides supply chain resilience, tariff hedging, and negotiating leverage. Done wrong, it doubles your management overhead, introduces quality risk, and saves less money than expected. Keep your complex precision work in China where the ecosystem supports it, move the right categories of parts to a well-chosen +1 destination, and commit real volume to the second source to keep them competitive. Diversification is insurance, and insurance costs money.

Frequently Asked Questions

Do I need to move production out of China to implement China+1?
No. The whole point of China+1 is that you keep your primary or strategic production in China while adding a second source in another country. The +1 is diversification, not replacement. Companies that interpret it as an exit strategy often find themselves rebuilding capabilities they already had in China.
How do I handle tooling when splitting production between two countries?
Dual sourcing requires either duplicating tooling (investing in a second set for the +1 supplier) or verifying that both suppliers can produce equivalent parts with their own tooling. Tooling duplication is a real cost that should be factored into the diversification business case.
What percentage of orders should I move to the +1 country?
There is no universal answer, but I generally see effective splits in the 20-40% range for the +1 supplier. Below 15-20%, the +1 supplier cannot run efficiently enough to be cost-competitive. Above 50%, you are essentially switching primary sources rather than diversifying.
Can my existing Chinese supplier help set up production in another country?
Some larger Chinese manufacturers have their own facilities or partnerships in Vietnam, Cambodia, or other countries and can support a coordinated dual-base strategy. This can simplify communication and quality management. It is worth asking your current supplier about their multi-country capabilities.
How long does a China+1 transition take?
For simple, high-volume parts, qualification of a second source can take 3-6 months including tooling, samples, FAI/PPAP, and initial production runs. For more complex parts, expect 6-12 months. A full multi-family diversification program typically runs 12-24 months.