1) Many of the companies are with working with low profit margins, i.e. the profit margin is <5%. With rising costs in both raw supplies and worker wages + low demand from abroad, many of these companies are being driven out of business due to their decreasing profit margin.
2) Since rising costs are eating into companies' profit margins, many companies are looking at relocating their manufacturing base from China to countries with [even] cheaper manual labor. For example, Foxconn has recently inked a multi-billion w/ Brazilian gov't to produce ipads and apple related products there. Other companies are looking to relocate their manufacturing base to SE asian countries like Vietnam where cheap labor and gov't wiling to bend the rules for FDI are still aplenty.
A Brazilian worker earning the minimum wage[1] every month, and considering that there's a whole set of taxes that an employer has to pay for every employee in Brazil, mainly for social security, that probably will turn every Brazilian employee worth almost 2 to 3 Chinese doing the same job.
So that's probably not the case for Foxconn as well.
[1]: Which according to Wikipedia is more in US dollars than what a typical Chinese worker in Shenzen earns in a month, US$ 390.93 versus US$ 208.32
If that's the real reason, it seems that Brazil's protectionist tariffs are having their desired effect (forcing more manufacturing to be relocated to Brazil). No idea if they're a net positive for Brazil's economy, but this move will probably be taken as a vindication.
In my opinion there are some positive effects but overall it's really bad.
As you can see in the link in the sibling comment, the overhead of employing people in Brazil is quite big. Besides, there's also additional overhead due to a myriad of non-labour-related taxes, and living cost and the minimum wage are significantly higher than in China and SE Asia.
So while we do have a large industrial base, it's not like we have factories for every kind of product just because of protectionist tariffs.
That results in the curious situation of having to pay (say) U$1000 in Brazil for some Chinese-made product that can be had for U$500 in the US.
1) Many of the companies are with working with low profit margins, i.e. the profit margin is <5%. With rising costs in both raw supplies and worker wages + low demand from abroad, many of these companies are being driven out of business due to their decreasing profit margin.
2) Since rising costs are eating into companies' profit margins, many companies are looking at relocating their manufacturing base from China to countries with [even] cheaper manual labor. For example, Foxconn has recently inked a multi-billion w/ Brazilian gov't to produce ipads and apple related products there. Other companies are looking to relocate their manufacturing base to SE asian countries like Vietnam where cheap labor and gov't wiling to bend the rules for FDI are still aplenty.
Like you said. We'll see what happens.