Sweden as an example is 10 million people. The world is 8000 million, 800x larger. The affluent parts of the world are somewhere between 100-1000 million, so the market potential is 10-100x larger. If one is able to address the global market, the economy of scale around manufacturing will be heavily in favor of that. This is particularly true for hobbyist stuff, because it tends to be both (relatively) low volume and low margin. And also price sensitive, in that people might just adjust their hobbies based on what is affordable/not.

This is just demand side. Of course producing in Sweden will be more expensive than in China - for electromechanical things, Shenzhen is likely better on every single metric...