Asian nations to cash in on rising China wages
Labour costs and the value of China's currency are sending ripples around Asia as countries jostle to lure manufacturers that are rethinking their Chinese operations, analysts and officials said.
Worker unrest at foreign-owned factories and the prospect of higher wage costs are forcing some manufacturers to consider countries such as Bangladesh, India, Indonesia and Vietnam, where wages remain relatively low.
Indonesian Trade Minister Mari Pangestu said in January that there was a "permanent trend" of shoe manufacturers shifting from China to Indonesia, resulting in 1.8 billion dollars of investment over the last four years.
Bangladesh, which has the lowest minimum wage in the world at just 25 dollars a month, is poised to reap the benefits as long as it can resolve its own chronic labour disputes and fix its crumbling infrastructure, experts say.
"Bangladesh has a huge opportunity to capitalise on rising costs in China," said Ifty Islam, an investment banker at Dhaka-based Asian Tiger Capital.
"But it is difficult to get more foreign firms to come if we can't prevent labour unrest," he said.
Bruce Tsao, an analyst with Capital Securities in Taipei, said dramatic wage hikes in the mainland were "adding more woe to labour-intensive industries in China already troubled by low profit margins".
"Such factories may not move out of China soon, but the trend is inevitable in the long term," he said.
Taiwan's Feng Tay Group, which supplies about one sixth of Nike sports trainers, said it was planning to boost production in India as its Chinese manufacturing base shrank.
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