China’s rise may see production shift to Southeast Asia
Reports of China allowing its currency to rise and of manufacturing workers demanding higher wages have re-invigorated rumors that companies may start to shift production out of China, and cheaper Southeast Asian countries will look to benefit. Some have already begun to make the move to countries like Indonesia and Vietnam, where workers often earn half the daily wage of their already low-cost Chinese counterparts.
China announced recently it would allow its currency to trade more freely against the dollar, and even a small rise could erode into profits of manufacturers operating at low margins. Recent incidences of industrial unrest have also halted production at several foreign-run operations in recent months, leading many to conclude China is longer the place to find an endless supply of cheap labor.
So… once workers in Southeast Asian countries have improved their lot, where will manufacturing look next?
source & article: Channel NewsAsia
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