“China Plus One” started as a phrase for electronics and textile buyers looking to add a second manufacturing base outside China, mostly in response to rising labor costs, tariff exposure, and the supply shocks of the past several years. It has since spread into chemical manufacturing and toll production, though for slightly different reasons than the ones driving the original trend.
Why chemical buyers are paying attention to this now
Freight costs out of China have swung wildly over the past few years, and buyers who depend on a single source for a key raw material or finished chemical product have learned, sometimes the hard way, what happens when that one source gets delayed by a port backlog, a regulatory change, or a factory shutdown. Diversifying does not mean abandoning China as a supplier. It means not being fully dependent on it.
Why Pakistan specifically
Pakistan has a geographic advantage that gets overlooked: it sits close enough to western China to serve as a logistics bridge through the China-Pakistan Economic Corridor, which we cover in more detail in our post on using CPEC to optimize chemical logistics. That matters for buyers who still want to move raw materials or intermediates between the two countries without routing everything through a single congested port.
There is also an existing base of chemical trade between Pakistan and China to build on. We have written about how Pakistan is already supporting production for some of China’s largest chemical manufacturers, and about the broader chemical services relationship between the two countries. A buyer looking to diversify is not starting from zero here. There is infrastructure, trade familiarity, and a workforce with relevant experience already in place.
What buyers should actually evaluate
Lower labor costs alone are not a reason to shift production. Before moving any volume to a new country, buyers should look at whether local toll manufacturers can meet the same quality specifications consistently, what the realistic lead time looks like once you account for customs and freight, and whether the regulatory environment supports the specific chemical category involved. Our post on why global brands are choosing Pakistan for third-party chemical manufacturing goes through this evaluation in more detail.
Where the gaps still are
It would be dishonest to pretend Pakistan matches China’s scale or its decades of specialized chemical infrastructure. Buyers looking for extremely niche specialty chemicals at massive volume will likely still need China as a primary source for the foreseeable future. What Pakistan offers is a credible secondary base for a defined set of categories: toll manufacturing, coatings and lacquer production, and certain intermediate chemicals, where quality and capacity have caught up even if total scale has not.
How this plays out for a buyer starting the conversation
Most buyers who reach out to us about diversifying do not want to move everything overnight. They want to qualify a second source, run smaller trial volumes alongside their existing supply chain, and build confidence before committing meaningful production. That is a reasonable way to approach it, and it is how most of our long-term toll manufacturing relationships actually started.
Frequently asked questions
What does “China Plus One” mean for chemical manufacturing specifically?
It refers to buyers adding a second manufacturing or sourcing base outside China for chemical products or toll manufacturing, rather than depending entirely on a single country for production. The goal is reduced supply chain risk, not replacing China as a supplier.
Why are chemical buyers considering Pakistan as an alternative to China?
Pakistan offers proximity to western China through the CPEC trade corridor, an existing base of chemical trade between the two countries, and growing toll manufacturing capacity in categories like coatings, lacquers, and chemical blending.
Is Pakistan a replacement for chemical manufacturing in China?
Not for everything. Pakistan works well as a secondary source for specific categories such as toll manufacturing and coatings production, but China still leads in scale and specialized chemical infrastructure for many product types.
