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April 6, 2011

Companies leaving China to find cheaper manufacturing

  • Some have looked at moving elsewhere in China but the cost savings won't last long as wages and prices rise across the country.
    • By KELVIN CHAN
    AP Business Writer

    GUANGZHOU, China — When millions of workers didn't return to their southern China factory jobs after Lunar New Year holidays, a turning point was reached for foreign manufacturers scraping by with slim profit margins.

    Companies were already under pressure from rising raw material costs, restive workers and lower payments for exports because of a stronger Chinese currency. Despite hiking wages, labor shortages kept getting worse as workers increasingly spurned the often repetitive and unskilled jobs that helped earn China its reputation as the world's low-cost factory floor.


     
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