(Yicai Global) March 8 -- Chinese auto parts supplier Hengshuai and electronics component maker Anjie Technology are mitigating risks of concentrated production in China by adding new capacity abroad to meet demand.

Hengshuai will invest no more than CNY200 million (USD29 million) to build a production base in Thailand, the Ningbo-based firm said in a statement yesterday.

Anjie has penned a letter of intent with industrial park developer Hofusan Real Estate to purchase an area of 71,076 square meters in Nuevo Leon, Mexico, to build a factory, the Suzhou-headquartered company said in a statement yesterday, without disclosing the schedule nor the scale of investment.

Rising labor costs and geopolitical risks in China have led to a recent increase in the number of mainland-listed companies building new production bases overseas. Evidently, both Hengshuai and Anjie said the goal of expansion is to better meet the needs of foreign customers while improving risk control.

Investing in Mexico should help Anjie better serve its North American clients while enhancing supply efficiency and grasping international trends and customer needs in the fields of new energy vehicles, consumer electronics, energy storage, and communication, it said.

Anjie provides precision die cutting and surface treatment solutions to makers of mid to high-end consumer electronics and electric cars. Half of the company's revenue comes from abroad, according to its 2021 earnings report.

Hengshuai mainly produces micromotors and related products for automobiles and counts BMW, Mercedes-Benz, General Motors, and Honda Motor as some of its clients, according to the supplier's website.

However, stock market performances were mixed as Anjie's equity price [SHE:002635] rose 2.3 percent to close at CNY14.08 (USD2). Shares of Hengshuai [SHE: 300969] dropped 0.8 percent to CNY66.93.

Editor: Emmi Laine, Xiao Yi