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Southeast Asia Reduces Labor Force And China Contends For Garment Manufacturing Industry.

2010/8/26 9:54:00 37

As manufacturers look around the world for cheaper production sites, China's rising labor costs are an opportunity for other developing countries.

But China's

salary

The rise has already spread to some of these new territories and has, to a certain extent, caused recent labour disputes in countries such as Kampuchea and Bangladesh.

A garment in Phnom Penh, Kampuchea, the workers are working.

Southeast Asia

The labor

The cost is lower than that of China, but the infrastructure is relatively backward.

All this means that these markets need to do more than wage competition with China.

They will need to upgrade basic infrastructure and other aspects of the economy before they can become viable alternatives outside China.

Credit Suisse

(Credit Suisse) recent surveys of major European and American companies found that only about 1/5 of the companies said it would be easy to pfer the source of purchase from China to other countries.

This is because China has a solid supplier network and freight infrastructure.

About 90% of the companies say that if they want to move from China to other countries, the cost will be very high.

Nevertheless, economists believe that as China's costs become higher and higher, investment will inevitably flow to other regions, thereby accelerating the improvement of supply chain and infrastructure in these areas.

Fan Limin Neumann, a senior Asian economist at HSBC in Hongkong, said that in the past 15 years, as investors poured into China for cheap labor, China almost squeezed all the countries together. Now, as China moves upstream to the value chain, other countries have the opportunity to take the opportunity to enter the lower end of the value chain. "(Frederic Neumann)