US Media: Western Companies Worry About Raising Wages For Chinese Workers

This year, China and its major low-cost competitors in Asia.

Hongkong Lifeng group is the largest trading company that purchases Chinese commodities for American retail chains.

President Le Yumin said Tuesday that the average cost of goods in the first 5 months of this year increased by 15% over the same period last year.

Other commodity companies also face similar or more serious problems.

Faced with Chinese wages rising at a two digit rate, executives of many companies are flying to Vietnam, Bangladesh, Indonesia and others.

Luxury brands in January announced that by moving the production line to Vietnam and India, the company's dependence on China will fall from the current 80% to less than 50% in 5 years.

But Vietnam's wage rise is not less than that of China, and India has always been a headache for big manufacturers.

Le Yumin said that India's infrastructure was "dilapidated", and labor services, including government regulations, made it impossible to build a Chinese style factory with tens of thousands of workers.

In addition, many garment enterprises still have many misgivings about procurement outside China.

"Everyone is worried about quality and needs to be trained for many years" to meet all kinds of specific requirements, said Bennett Model, President of Cassin, an American fashion designer.

Le Yumin said that through the use of social networking sites, workers in developing countries all over the world are more aware of salary and increase the salary pressure of enterprises.

He and other company leaders predict that over the next 5 years, factories that are over concentrated in southeastern China will gradually spread to all parts of China.

Workers are increasingly reluctant to spend 3 days in the coastal industry by means of pportation, especially when domestic demand grows inland and creates more jobs.

Even the recently opened high-speed rail lines failed to bring enough migrant workers back to coastal factories.

In addition, the wage increase in inland China is even higher than that in coastal provinces, and the wage gap with the latter is gradually narrowing.

Many companies choose to stay in China for their reasons: This is the fastest growing area for their sales.

China has become the largest market for many products, such as automobiles and steel.

Production and sale in China can prevent enterprises from facing the policy of "buying Chinese goods", anti-dumping investigations and other import restrictions.

They can also be protected against exchange rate fluctuations.

Wage growth and strong currencies have reduced Asia's attractiveness to western high value-added industries such as automobile manufacturing.

But hardly anyone in the industry mentioned the possibility of returning these relatively labor-intensive manufacturing industries to the US or Europe.

Le Yumin also held a negative attitude towards this statement.

"The western world is not working in such industries," he said. "For the" made in Italy ", the workers are now very old, and no new workers can afford it.