Southeast Asian Countries Attract Manufacturers To Pfer Production Lines At Low Cost.

As manufacturers look around the world for cheaper production sites, China's rising labor costs are an opportunity for other developing countries.

Coupled with the recent depreciation of the Vietnamese shield, in February 11th, the Dong shield depreciated against the US dollar by 9.3%.

The impact of Vietnam shield depreciation on China's textile exports is obviously large.

According to a survey of 385 international buyers released last month by GlobalSources, a world-renowned media company, most buyers said they needed to pay higher prices for Chinese products, and 31% of respondents said they would increase purchases from Vietnam.

The survey also shows that China's textile exporters have already felt that orders are shifting. One of the reasons is that Vietnam's price is 30% cheaper.

200 million shirts can only bring in 1 Boeing airliners.

"China is a big clothing country, but it is not.

It is reported that Vietnam maintained an average annual growth rate of about 7% from 1986 to 2006, which is second only to China in Asia.

The rise of the "Asian tiger" relies on cheap labor and abundant natural resources, which are threatening China's low-end manufacturing exports.

Local media reported that in the shoe industry, for example, in the first two years, a shoe factory worker in Vietnam had a monthly income of about 500 yuan, while workers in Chengdu, Sichuan had a monthly income of at least 1000 yuan.

Nevertheless, economists believe that as China's costs become higher and higher, investment will inevitably flow to other regions, thereby accelerating the improvement of supply chain and infrastructure in these areas.

Le Yumin, President of Hongkong trading company Li Fung Limited, recently said at a news conference that even if not all countries, at least most countries, will get pricing guidelines from China.

Nevertheless, Li Fung has been able to resolve some of the cost pressures by pferring business to Indonesia and Vietnam.

Southeast Asia, which is close to 600 million of the population, was once a hot spot in the world until it was eclipsed in China.

Now the advantages of cheap labor are emerging again.

The average monthly salary of factory workers in Vietnam last year was about 136 dollars, and Indonesia was about 129 dollars, much lower than the average monthly salary of China's 413 dollars.

Southeast Asia also has a huge obstacle. Kampuchea, Vietnam and Indonesia, although wages are much lower than China, they all have problems of inadequate infrastructure and can not support manufacturing industries that are much larger than before.

Many companies in Southeast Asia are also striving to achieve the goal of cooperation among enterprises.

More than 10 Southeast Asian garment suppliers have recently reached an agreement to build a garment supply chain between Kampuchea and other garment processing companies and suppliers in Thailand or other neighboring countries.

In fact, these companies have reached an agreement to cooperate in the production of commodities, with a view to providing a "one-stop" service for clothing similar to that provided by Chinese clothing suppliers, namely, procurement of yarn, cloth, buttons and sewing in the same area.

Wen Shuyang, chairman of the Kampuchea Garment Manufacturers Association, said that the vision of Southeast Asia is to realize the operation mode of "one country, many provinces" rather than divide and rule ten countries in one region.

He said that although countries are very different, they have to compete for more business from China.

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Malaysia PCCSGroup, a member of the chamber of Commerce, has operations in China and Kampuchea.

YikThongChoon, assistant general manager of the company, said that they had two factories in China. In the past 6 months, the wages of the workers in the factory had risen by about 50%. Due to the scarcity of labour force, the capacity of two factories is still less than half.

In stark contrast, the number of factory recruits in Kampuchea exceeds its actual needs.

The situation of oversupply of the labour force will gradually change, but even if there is tension in the future, it can also be alleviated, because the company is recently promoting cooperation with a Thailand fabric producer in order to provide support for Hongkong's clothing retailer business, so that the company has the opportunity to use the larger regional labor market to complete the garment products.