Friday, March 16, 2012

With Rising Wages in China, Production is Moving

1. From the WSJ on Wednesday:

"Global companies already have been facing higher labor prices in China over the past year, despite a weak global economy, as workers demand a greater share of the country's economic boom. In recent months, the pressure also has intensified in countries across Southeast Asia that have marketed themselves as alternatives for companies seeking to escape China's rising costs, leaving those companies now with fewer places to move.

Over the past year, for example, U.S. menswear retailer Jos. A. Banks Clothiers has moved some manufacturing from China to cheaper locations in Asia such as Indonesia, as the price of labor and goods increased."

2. And now even Chinese bicycle manufacturers are started to move production overseas:

"Chinese bike manufacturers are beginning to look at expanding into new markets in Southeast Asia in the face of rising labor costs and restrictive export duties to Europe.

Manufacturing has already begun shifting inland from China’s coastal cities as labor costs have risen, and now producers are beginning to look overseas to keep prices competitive on low-end mass production."

HT: Mike Henne


At 3/17/2012 9:33 AM, Blogger VangelV said...

Note the inconsistency here? Not too long ago we were being told that the US would benefit because Chinese labour was getting expensive. This story tells us that the relocations are not to the US but to inland locations within China and to other SE Asian nations.


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