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Rising costs cause Chinese business exodus.
BBC
Low wage costs attract investors to Vietnam
Honda says production is returning to normal at its Chinese car lock factory. The Japanese automaker says the majority of workers at the Guandong plant agreed to end their strike after an undisclosed pay rise. However some employees are still holding out for a better offer.
The dispute is the third Chinese action to hit Honda in recent weeks, and many other firms have also been affected by labour unrest and a resulting rise in wages.
That is causing disquiet in Taiwan, one of the biggest investors in manufacturing on the mainland - and some of its industries are now shifting production across the border to Vietnam.
Low wage costs attract investors to Vietnam
Vietnam is booming.
The economy is forecast to grow by 7% this year.
Traditionally, the country's wealth has come from agricultural exports and low-cost industries like shoes and garments.
But rice, coffee and affordable clothing are global commodities: basic items that yield very low profit margins.
So, in recent years, the government has been working to attract higher value industries to Vietnam.
Average wages - or seen from a company's point of view; labour costs - are still lower than those of its other neighbours Thailand and China. Vietnamese factory workers earn just two thirds of what their comrades in China bring home.
Companies such as Foxconn, which assembles gadgets and phones for big brand companies such as Apple and Sony, already operate on razor-thin profit margins.
They rely on huge workforces turning over huge volumes of goods very quickly to make their money.
The toy industry is another low cost, high volume industry.
And Toh Poh-Heng is the general manager of another Taiwanese firm, Lovely Creations.
His cuddly toys end up on the shelves of cut-price retailers such as Walmart and Family Dollar.
Wages in China's coastal manufacturing areas, such as Ningpo, where his main factory is based, have risen between 15 and 20% this year.
He says his profit margins have been halved in just five years. Many of his competitors have already gone bust.
"The final choice we may have to take is to move production to a lower cost area like Indonesia or Vietnam," he says.
Young workforce
But, low wages are not the only attraction. Jeffrey Joerres, chairman and chief executive of Manpower, made his first trip to Ho Chi Minh City this month. The world's second biggest employment agency is really excited about Vietnam.
Foxconn Closing China Factories?
According to a Chinese news site, electronics manufacturer Foxconn is closing its China-based factories – including the Shenzhen location which has been scrutinised over rampant employee suicides.
This could mean that up to 800,000 workers would lose their jobs
According to the yet-to-be-confirmed report by ON.CC, Foxconn is withdrawing from China because it intends to shift its focus onto factories in Taiwan, Vietnam and India.
.
BBC
Low wage costs attract investors to Vietnam
Honda says production is returning to normal at its Chinese car lock factory. The Japanese automaker says the majority of workers at the Guandong plant agreed to end their strike after an undisclosed pay rise. However some employees are still holding out for a better offer.
The dispute is the third Chinese action to hit Honda in recent weeks, and many other firms have also been affected by labour unrest and a resulting rise in wages.
That is causing disquiet in Taiwan, one of the biggest investors in manufacturing on the mainland - and some of its industries are now shifting production across the border to Vietnam.
Low wage costs attract investors to Vietnam
Vietnam is booming.
The economy is forecast to grow by 7% this year.
Traditionally, the country's wealth has come from agricultural exports and low-cost industries like shoes and garments.
But rice, coffee and affordable clothing are global commodities: basic items that yield very low profit margins.
So, in recent years, the government has been working to attract higher value industries to Vietnam.
Average wages - or seen from a company's point of view; labour costs - are still lower than those of its other neighbours Thailand and China. Vietnamese factory workers earn just two thirds of what their comrades in China bring home.
Companies such as Foxconn, which assembles gadgets and phones for big brand companies such as Apple and Sony, already operate on razor-thin profit margins.
They rely on huge workforces turning over huge volumes of goods very quickly to make their money.
The toy industry is another low cost, high volume industry.
And Toh Poh-Heng is the general manager of another Taiwanese firm, Lovely Creations.
His cuddly toys end up on the shelves of cut-price retailers such as Walmart and Family Dollar.
Wages in China's coastal manufacturing areas, such as Ningpo, where his main factory is based, have risen between 15 and 20% this year.
He says his profit margins have been halved in just five years. Many of his competitors have already gone bust.
"The final choice we may have to take is to move production to a lower cost area like Indonesia or Vietnam," he says.
Young workforce
But, low wages are not the only attraction. Jeffrey Joerres, chairman and chief executive of Manpower, made his first trip to Ho Chi Minh City this month. The world's second biggest employment agency is really excited about Vietnam.
Foxconn Closing China Factories?
According to a Chinese news site, electronics manufacturer Foxconn is closing its China-based factories – including the Shenzhen location which has been scrutinised over rampant employee suicides.
This could mean that up to 800,000 workers would lose their jobs
According to the yet-to-be-confirmed report by ON.CC, Foxconn is withdrawing from China because it intends to shift its focus onto factories in Taiwan, Vietnam and India.
.
