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    China Drives Manufacturing Costs Rising In Surrounding Areas

    2010/8/21 9:27:00 34

    Manufacturing Cost

    Events in the past few months have clearly demonstrated China's

    The labor

    The cost is rising.

    Other Asian countries

    manufacturing industry

    The economy is also affected.


    So is Le Yumin, President of Li & Fung Ltd., Bruce Rockowitz.

    Li Feng is a neighbor of Hongkong's trade and logistics industry. One of the main buyers of toys and clothing is WAL-MART (Wal-Mart) and Target.


    When Le Yumin announced his half yearly performance in Hongkong on Thursday, we said that the prices we and our customers have already risen, we have eased the pressure through purchasing from Bangladesh, Vietnam and Indonesia.


    But the labor force in these countries and

    Raw material

    Costs are also rising.


    He said that these countries do not say all of them, at least most of them are looking for guidelines for pricing from China. When the price of China rises, most other countries will follow up. There is also the problem of rising labor costs in other parts of the world outside China.


    Li Feng plays an intermediary role between manufacturers in China and Southeast Asia and retailers in Europe and the United States.

    The company has a good understanding of the trade and manufacturing of global consumer goods.

    Of the goods it handles, China makes slightly over half, Southeast Asia accounts for 21%, and South Asia accounts for 15%.

    The fastest growth in output in the first half of the year was India, with an increase of 27%, while Vietnam and India increased by 19% and 15% respectively.

    China has increased by 10%.


    Le Yumin said, we are experiencing a major change in the manufacturing industry, and this change will only be calm after several years.


    The rise is not just about labor costs.


    He said raw material prices have also risen and commodity prices have risen. Overall, cost pressures must exist, though the market is relatively weak.


    Retailers will have to digest these increased costs themselves rather than pass them on to consumers who are short of money.


    Le Yumin said that most retailers are accepting price increases, and they have no choice.

    Not only is China's price rising, it is rising everywhere.

    I think it will be more difficult to pass the price increase to the consumers in the market.

    So what retailers really want is how to improve efficiency and how to reduce sales promotions.


    In the overall view of the economy, Le Yumin feels that consumer sentiment has fluctuated in the past few weeks.


    He said, for retailers, although no matter how the business has not declined significantly, but it has not been able to compare with that year; now the slowdown is certainly not the two time, consumers are still spending money; this is a change, and we do not know how long it will last.


    Li Feng originated from a trading company founded in mainland China in 1906.

    Now it helps retailers purchase goods from Asian manufacturing centers and deliver goods to the shelves of American and European stores.

    The company's profits in the first half of the year have been rebounded compared with last year's Global trade pause.

    Revenue was $6 billion 640 million, an increase of 12%, and the shareholders' profits should be $278 million, an increase of 55%.

    Le Yumin said this is the best half year we have ever had.

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