WantChinaTimes.com

Knowing China through Taiwan

  • Wednesday, September 17, 2014
  • RSS

China's role as 'the world's factory' in the balance

  • Staff Reporter
  • 2012-11-05
  • 17:17 (GMT+8)
A leather clothing production line in Haining of China's southern province of Zhejiang. (File photo/Xinhua)

A leather clothing production line in Haining of China's southern province of Zhejiang. (File photo/Xinhua)

More and more global manufacturers have shifted their bases to Southeast Asia countries from China over the past few years, due to the country's increasing labor costs and concerns over trade barriers, reports the Economic Information Daily.

The trend has threatened China's position of "the world's factory," a position that has been established for decades. Some manufacturing companies in the country's southeastern province of Guangdong have started moving their production lines to Southeast Asia countries. The province accounted for 60% of world's electronic and information technology production with its ability to integrate and coordinate different industries.

However, Chen Zhihua, president of the Guangdong Computer Chamber of Commerce, said that the companies chose to move to Southeast Asia countries instead of China's western places because of the increasing labor costs of the manufacturing belt on the country's southeastern coast.

Foreign direct investment flowing into Southeast Asia countries was US$117 billion in 2011, up 26% from a year earlier. The growth rate was only 8% for China during the same period.

Avoiding a conflict of trade barriers between China and the United States and Europe is another reason the companies decided to shift production lines to Southeast Asia countries.

The companies can effectively avoid the trade barrier conducted by the United States and Europe against China and dodge possible trade barriers between China and Southeast Asia countries after moving their manufacturing bases to the region.

Though China will face the growing challenges from Southeast Asia countries in manufacturing industry, China's manufacturing power will still dominate the global market in the near future. The basic infrastructure of Southeast Asia countries is still far behind that of China, analysts said.

Who's Who

  • Dong Wenbiao (董文標)

    Dong Wenbiao (董文標)

    Graduated from Xiamen University in 1993, Dong Wenbiao is currently the president of China Mingsheng Bank.Born: June, 1957Birthplace: Ye county, ...