Global brands that once shifted part of their production out of the country are now turning back as they rediscover China's enduring manufacturing edge.

Steve Madden, the US-based footwear and accessories brand, began diversifying production last November, announcing in the first quarter that only a mid-teens percentage of goods would be sourced from China. But by the second quarter, Steven Madden Ltd's Chairman and CEO Edward Rosenfeld said on an earnings call earlier this month that some production had been shifted back to China for the autumn season.

"We felt it would be difficult to ensure on-time delivery, appropriate product quality and/or reasonable pricing if we sourced elsewhere," Rosenfeld said.

The Steve Madden brand is not alone. Intersport International Corp, the Switzerland-based sporting goods retailer, is also weighing a pivot back to China. The company sees an opportunity to tap into the country's unrivaled supply chain efficiency at a time when many rivals are moving production to Southeast Asia and other developing markets. The group is considering sourcing a greater share of its private-label products from China.

Industry analysts said the country's deep integration of manufacturing resources and skilled workforce remains compelling.

Cheng Weixiong, an independent fashion analyst and founder of Shanghai Liangqi Brand Management Co Ltd, said, "It is a timely move for companies like Steven Madden and Intersport to shift more capacity back to China, where costs are currently lower and orders in some manufacturing facilities are insufficient."

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said that China offers advantages beyond manufacturing costs.

"The country's end-to-end supply chain enables brands to go from design to mass production in weeks," Bai said. "For businesses that value speed, scale and sophistication, China is both a consumption powerhouse and an innovation accelerator."

The toy industry is another case in point. Despite tariff headwinds, Chinese manufacturers continue to concentrate most of their operations domestically despite many relocating some of their capacities in Southeast Asian markets.

"Many toy makers still keep 70 to 80 percent of their capacity in China and about 20 percent in Southeast Asian markets," said Liu Zhenlie, head of the Shenzhen Toys Industry Association.

"Labor and costs are now about 5 to 10 percent higher in Southeast Asia, while China maintains strong supply capacity and rapid supply-chain response."

Liu also said the toy sector in Shenzhen, Guangdong province, has maintained mild growth so far this year.

Meanwhile, Southeast Asia's manufacturing sector is expanding rapidly but faces challenges. According to Savills, Vietnam's industrial parks reached 86 percent occupancy in the first nine months of 2024, with average land prices topping $170 per square meter. Northern provinces offered cheaper land than the south, but availability remains tight, underscoring the limits of large-scale relocation, according to the report.