China+1 and the Pressure Vessel: Which Scopes Move, and Which Ones Do Not Yet

China+1 stopped being a slide

In 2026 China+1 has stopped being a slide in a strategy deck and become a line item in a sourcing plan. Almost every EPC procurement director now has a board, a client or a risk committee asking them to show how the supply chain is being diversified.

The macro numbers behind that pressure are worth stating precisely.

Vietnam now has 478 operational industrial parks, with occupancy in the southern regions running at 89–92% and several parks essentially full (Vietdata, 2026). India has put the largest single industrial incentive package on the table: the Production Linked Incentive scheme, roughly USD 26 billion across 14 sectors, which has attracted cumulative investment of more than INR 2.16 trillion (DPIIT, 2026). Manufacturing wages in China have roughly tripled since 2010 (ILO data, cited via docshipper.com, 2026), which has closed much of the old labour-cost arbitrage. In electronics specifically, surveys report that around 40% of firms plan to raise the share of their supply chain sitting in India and Vietnam by a further 15–25% (vietnam-briefing.com, April 2026).

The direction of travel is not in doubt. What is in doubt, and what is rarely costed properly, is whether that direction applies uniformly to every category of equipment being bought.

This is written from the equipment supply side. Lmart supplies pressure vessels, shell-and-tube heat exchangers, refrigeration and compressor packages and skid units to EPCs, design institutes and owners. That gives a narrow but fairly clear view of one question: what happens when a buyer tries to move ASME pressure equipment out of an established supply chain and into a new one.

This is not an argument that Southeast Asia cannot do it. The honest position is narrower and more useful: Southeast Asia is not incapable here, it is early. Labour-intensive scopes migrate quickly. Process-intensive scopes have to grow a supply chain around them first, and supply chains grow on a timescale that no incentive scheme fully compresses.

What China+1 actually means

China+1 is not leaving China. It is keeping the primary chain and adding a second base — Vietnam, India, Mexico, Thailand — so that tariff exposure, export-control exposure and geopolitical exposure are not concentrated in one jurisdiction.

Three forces drive it, and all three are legitimate:

• Cost. The wage arbitrage that made the original China build-out compelling has narrowed substantially.
• Risk. A single-country chain is fragile in front of tariffs and export controls. Buyers want a second basket.
• Policy pull. Vietnam sits adjacent to the existing supply base and offers a route to Western markets outside China rules-of-origin. India is writing cheques.

For consumer electronics, textiles, light metal parts and standard fasteners, this is not a forecast. It is already happening at scale, and the people doing it are right to do it.

The interesting question is what happens when the same logic is applied to an ASME Section VIII Division 1 pressure vessel.

Sort the package by category, not by country

Rank scopes by migration feasibility and the picture resolves immediately.

Procurement category	Feasibility of moving to SE Asia today	Binding constraint
Consumer electronics, assembly	High	Labour-intensive; chain already formed
Textiles, garments	High	Low skill barrier; policy-friendly
Light metal parts, hardware	Medium	Some raw material still sourced from China
Standard fasteners	Medium	Low certification burden
ASME pressure vessels	Low	Material, welding, certification, inspection all thin
Shell-and-tube exchangers	Low	Tubesheet deep-drilling, tube supply, process know-how
Cryogenic / duplex equipment	Very low	Special materials plus welding qualifications largely absent

What separates the top of that table from the bottom is straightforward. The scopes at the top compete on labour and land. The scopes at the bottom compete on supply-chain depth. Supply-chain depth is the slowest-accumulating asset in industrial development, and it cannot be relocated by decree, because it is not held inside any one factory. It is distributed across mills, welding schools, certification bodies, NDT houses and inspection agencies that all have to exist within reach of each other.

The four yardsticks

When a client asks whether a given piece of equipment can be sourced from a new region, the answer is four checks rather than a view.

Yardstick 1 — Material

A pressure vessel is not some steel, welded. It requires pressure-grade steel with a mill certificate traceable to the heat number: SA-516 Gr.70 and SA-240 304L/316L as the workhorses, then duplex 2205 and 904L, and for cryogenic or aggressive service, nickel alloys such as Inconel (SB-163 N06600) and Incoloy (SB-536 N08330).

China has a complete special-steel supply system and live stock. Material can be locked with a phone call.

In Southeast Asia today most of these grades are imported, and the import chain frequently routes back through China. That is not a criticism; it is where the mills currently are. But it means a local vessel often has a non-local material lead time hiding inside its schedule, and the buyer discovers this at week six rather than week one.

What to ask: can the shop lock your specific grade domestically, with mill certificates traceable to heat number? If not, whose lead time are you actually buying?

Yardstick 2 — Welding

Compliant welding requires a qualified procedure, PQR and WPS, for each combination of material, thickness range and welding position, plus certified welders working inside that envelope.

We hold 600+ PQRs. That is not a number that can be bought; it accumulates one qualification at a time, over more than a decade of building things that had to pass.

Fabricators across Southeast Asia do competent carbon-steel work today. What is still thin is coverage of the hard cases: duplex, high-nickel alloys, thick-wall and cryogenic service. Those qualification libraries are being built. They are not built yet.

What to ask: request the PQR index, pick three at random, and verify that they cover your material, your thickness and your position. Not a similar one.

Yardstick 3 — Certification

Equipment carries the stamp of the market it is sold into: ASME U-Stamp (BPVC Section VIII, Division 1), PED 2014/68/EU with CE marking for Europe, ISO 9001 for the quality system. For marine and offshore scope, add class approvals: CCS Type and Works Approval plus works approval from DNV, LR, BV, NK and RINA. For the Korean market, KGS is often the gate.

None of these arrives in the post. Each sits on top of continuous system audits, shop surveys and product witnessing.

This is the distinction that gets lost in sourcing decks: being able to fabricate to a code is not the same as being certified to it. The first is a shop-floor capability. The second is institutional, and institutions accrete slowly.

What to ask: which certificates are held today, with what scope and what expiry — not which are in application.

Yardstick 4 — Inspection

Serious projects run an ITP with owner and third-party hold and witness points: radiography, ultrasonic testing, hydrotest, post-weld heat treatment. Every step is witnessed and documented.

China's third-party inspection and NDT ecosystem is dense, and remote witnessing has become routine. Where that ecosystem is thinner, every witness point costs an inspector mobilisation. The cost that hurts is not the invoice, it is the two weeks of schedule waiting for a diary to align.

What to ask: who witnesses your hold points, how far do they travel, and what does one extra mobilisation do to the critical path?

The costs that do not appear in the comparison

A China+1 comparison usually lines up two unit prices. The costs that decide the outcome sit elsewhere.

• Qualification cost of the new vendor. A qualification audit, a first-article inspection and a trial order are real spend before any saving is realised, and they are typically charged to the buyer's own team rather than the purchase order.
• Schedule risk on first articles. A first unit from a new shop takes longer than a repeat unit from an established one, and the difference lands on the project, not the vendor.
• Documentation maturity. A complete, reconciled data book is itself a learned skill. Incomplete completion documents delay acceptance and payment regardless of equipment quality.
• Rework exposure on hard materials. Where welding qualification coverage is thin, the probability of repair welds and re-testing rises, and both consume schedule at the worst point in the programme.
• Freight and duty repricing. Moving the origin changes rules-of-origin treatment and freight routing. Sometimes favourably, sometimes not, but it should be calculated rather than assumed.

None of these argues against diversification. They argue for costing it honestly, so that the decision survives contact with the schedule.

A workable way to run it

The version of China+1 that works on process plant equipment tends to look like this:

1. Split the package by category rather than moving it wholesale. Structural steel, platforms, piping spools and standard fasteners are genuinely mobile. Code vessels, exchangers and cryogenic equipment are not, yet.
2. Dual-source at the category level, not the project level. Qualify the second source on a scope it can actually deliver today, and let it grow into harder scopes across several projects.
3. Start the qualification before you need it. A vendor qualified under schedule pressure is qualified badly. The audit, the first article and the trial order want a quiet quarter.
4. Re-test the assumption annually. The picture in this article is a snapshot of 2026. Capability is being built, and the answer for duplex equipment in 2029 may not be the answer today.

The useful conclusion is not that one region wins. It is that the migration feasibility of a scope is a property of the scope, not of the country, and a sourcing plan that recognises that will outperform one that moves everything at once.