China is no longer the sole player in supplying certain products (such as textiles and low end consumer products). The rise of the South East Asian countries for recent years can not go unnoticed, and in the upcoming years they will be more dominant. China has been growing and the wealth is visible at especially the coastal cities. The buying power of the Chinese citizens is increasing day by day. Labor cost in coastal China has skyrocketed, not only for the skilled workers but also for the basic workers. As Chinese wages soar, buyers are looking elsewhere. South-East Asia could be the next big thing. Speaking of the garment industry specifically, China still dominates the business. It supplies nearly half of the European Union’s garment imports and 41% of America’s. But more orders are shifting to lower-wage economies such as Cambodia and Vietnam, which is already the second-largest supplier of clothes to America.
Southeast Asian container shipments to the U.S. and Europe are rising as much as 10%, as manufacturers move production from China because of lower costs, according to cargo-booking technology provider Inttra. Vietnam, Malaysia and Thailand are among Southeast Asian countries to have benefited from trade shifts. They increased their production of consumer goods and of components that are shipped to other countries for final assembly. Low-cost manufacturers have been moving from China because the yuan has strengthened about 7% against the dollar in the past two years. In terms of labor costs, the cost to company per employee is increasing across China due to uneven supply, high demand, inflationary pressure, organized labor demands, and growing social spending requirements. But Western China still offers very reasonable wages for skilled and semi-skilled labor. [Read more...]
