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Shift in production lines away from China will continue
30
Jul '12
Several multinational companies will shift their production lines from China to Southeast Asian countries in near future, according to experts.
 
In addition to the minimum wage, enterprises in China have to pay towards insurance and welfare costs for their workers, which further raises the cost of labour.
 
For the last two years, annual wage rise in Chinese manufacturing industries has been more than 20 percent, which has considerably brought down the profit margins of enterprises.
 
Owing to rising costs, the market share of some of China’s traditional labour-intensive products has decreased significantly in Europe, Japan and the US.
 
If the trend continues, more and more multinational companies will relocate their production units to Southeast Asian countries, according to experts.
 
They believe that to stop the trend, industrial upgrading is very necessary and it could even determine the success or failure of industry’s structural adjustment process.
 
On the whole, experts aver that it is currently just the beginning for “Made in China” to become more expensive, and rising cost will be a long-term trend in China.
 

Fibre2fashion News Desk - China


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