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cheap' era on the wane
SHANGHAI - Factory workers demanding better wages and working conditions are hastening the eventual end of the era of cheap costs that helped make southern coastal China the earth's factory floor,[url=http://woolrichschweizch.gengfl.com/][b]Woolrich Parka Winter Woolrich Online Shop Schweiz Sale Die Gute Qualität Woolrich[/b][/url].
A number of strikes over the past 8 weeks have been a wakeup demand many foreign firms that rely on China's low costs to compete overseas, from makers of Christmas trees to manufacturers of gadgets like the iPad.
Where once low-tech factories and scant wages were welcomed inside a China wanting to escape isolation and poverty, workers now have to have a bigger share of the profits. The government, meanwhile, is pushing foreign companies to create investments in areas it believes will create greater wealth for China, like high technology.
A lot of companies are striving to remain profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West.
"China is going to undergo a very dramatic period. The big companies are starting to exit. We all see the writing about the wall," said Rick Goodwin, a China trade veteran of 22 years, whose company links foreign buyers with Chinese suppliers.
"I have 15 major clients. My job is to provide the best advice I can give. I tell it enjoy it is. from China. was becoming cheaper," said Sean Correll, director of consulting services for Burlington, Mass.-based Emptoris.
That could soon become true for publishers, too. Printing a 9-by-9-inch,[url=http://peutereyjacketsuppliers.webmium.com/][b]Peuterey Jacket[/b][/b][/url], 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. And also you don't have Thirty days on the water in shipping," he says.
Even with recent increases, wages for Chinese personnel are still a small fraction of those for Americans. But studies do show China's overall cost advantage is shrinking.
Labor costs have been climbing about 15 percent a year since a 2008 labor contract law that made workers more aware of their rights. Tax preferences for foreign companies led to 2007. Land, water, energy and shipping costs take presctiption the rise.
In the newest survey,[url=http://parajumpersoutletjackets.webmium.com/][b]parajumpers outlet[/b][/url], issued in February, restructuring firm Alix Partners discovered that overall China was more expensive than Mexico, India, Vietnam, Russia and Romania.
Mexico, in particular,[url=http://rogerviviershoes.webmium.com/][b]http://rogerviviershoes.webmium.com/[/b][/url], has gained an edge thanks to the United states Free Trade Agreement and fast, inexpensive trucking, says Mike Romeri, a professional with Emptoris, the consulting firm.
Makers of toys and trinkets,[url=http://duveticadoudoune.halod.com/][b]Femmes Manteaux Duvetica Soldes[/b][/url], Christmas trees and cheap shoes already have folded by the thousands or moved away, some to Vietnam, Indonesia or Cambodia. But those countries don't have the huge employees,[url=http://parajumpersoutletjackets.webmium.com/][b]parajumpers vest outlet[/b][/url], infrastructure and markets China can provide, and many face the same labor issues as China.
So far, the biggest impact seems to be around Shenzhen,[url=http://wheretobuyrogerviviershoes.webmium.com/][b]http://wheretobuyrogerviviershoes.webmium.com/[/b][/url], a former fishing village in Guangdong province, bordering Hong Kong, that is home to a large number of export manufacturers.
That includes Taiwan-based Foxconn Technology, a supplier of iPhones and iPads to Apple Inc. Foxconn responded to a spate of suicides at its 400,[url=http://woolrichdeutschlandarcticparka.albirank.net/][b]http://woolrichdeutschlandarcticparka.albirank.net/[/b][/url],000-worker Shenzhen complex with pay hikes that more than doubled basic monthly worker salaries to $290. Strike-stricken suppliers to Honda Motor Co. and Toyota Motor Corp., among many more, also provide hiked wages.
Foxconn refused repeated requests for discuss plans to move a lot of its manufacturing capacity to central China's impoverished Henan province, where a local government website has advertised for thousands of workers on its behalf.
But among other projects farther inland, Foxconn is teaming track of some of the biggest global computer makers to construct what may be the world's largest laptop production hub in Chongqing, a western China city of 32 million where labor costs are estimated to become 20 to 40 % less than in coastal cities.
Because of the intricate supply chains and logistics systems which have helped to make southern China an export manufacturing powerhouse, such changes won't be easy.
However for manufacturers seeking to boost sales inside fast-growing China, shifting production towards the inland places that many migrant workers originate from, and costs are lower, provides the most realistic alternative.
Many factories in Foshan, another city in Guangdong that saw strikes at auto parts plants supplying Japan's Honda,[url=http://parajumpersoutletjackets.webmium.com/][b]http://parajumpersoutletjackets.webmium.com/[/b][/url], have left in the past couple of months, mostly moving inland to Henan, Hunan and Jiangxi, said Lin Liyuan,[url=http://woolrichdeutschlandarcticparka.albirank.net/][b]Woolrich Parka Günstig[/b][/url], dean at the privately run Institute of Territorial Economics in Guangzhou.
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