工厂迁移趋势停滞不前

The OEMs choosing to move overseas are mainly Taiwan enterprises. And most of them resettle their factories in countries like Vietnam and Cambodia because labor costs are lower.

Wang Xinghua is a Taiwan entrepreneur in the shoe business. He used to want to move his factory overseas. But now he has changed his mind and he says many Taiwan manufacturers on the mainland who are also in a labor intensive industry like his have also abandoned such thoughts.

"When chatting with friends in our business circle, I found that they've basically stopped thinking about moving their factories to Southeast Asian countries. As for me, the main reason is that even though the salaries are lower, the efficiency of workers there is not as high as those on the mainland."

There are more than 3,000 Taiwan shoe enterprises in the Pearl River Delta area where most labor intensive enterprises were located before 2008. Currently the number is down to 2,000. Among them, about 300 moved their factories to Southeast Asian countries. But Wang Xinghua says the advantages of the lower labor costs are diminishing gradually.

"The labor costs in those countries have reached half of the cost of the mainland, some are even quite close to mainland costs – that's about 200 to 300 dollars a month. So in terms of labor costs, they don't have as much attraction."

Labor costs and workers' efficiency are just some of the factors which influence entrepreneurs' decisions to move or not in order to increase profits.

Language barriers and cultural differences have also contributed a lot towards reversing the trend. Wang Xinghua says:

"In some countries, strikes are very prevalent. If a strike happens right before you are about to ship out your goods, it may seriously affect our management. An entrepreneur's dignity may also be harmed."

Lack of a proper transportation infrastructure is another reason why businesses are reluctant to relocate. Chen Zhenghua is a shoe making material manager.

"Their infrastructures like road and transportation facilities cause great problems. So for us, the development potential is very limited if that country's transportation system is underdeveloped."

Compared to China, the industry chain in some Southeast Asian countries still needs to be perfected. For instance, some shoe enterprises have moved there, but the raw materials and some other resources still need to be imported from China. These may increase the transportation costs and diminish the advantage of low labor costs.

For CRI, I am Li Dong.