Is China A World Factory?

Maybe China is a world-famous factory, but with the development of the world's factory

Top Form International has been supplying WAL-MART (Walmart) from its factory in Southern China, but as workers demand higher wages, the company is forced to face the new reality of China.

Michael, chief financial officer of Michael Austin, sits in a Hongkong office separated from Guangdong province. The company finds its wages rise by 20% every year.

"China's policy is to double wages in five years, and we estimate that it will be faster than that."

Shenzhen, a special economic zone adjacent to Hongkong, raised its minimum wage from 1100 yuan (172 US dollars) to 1320 yuan in April. The company then accelerated its plan to cut down sewing workers from 1000 to 1000 a few years ago.

Electronics foundry

But the bigger challenge is the change in China's demographic structure.

Fewer and fewer young workers join the workforce every year.

Because of the one-child policy and the general preference for boys, the practice of selective abortions of female fetuses has produced an abnormal phenomenon - fewer and fewer women workers in factories.

Business owners in Southern China reported that the proportion of male and female workers in factories was 60:40, whereas women used to dominate in the past.

Last week, Jonathan Anderson, an economist at UBS, analyzed and calculated the import data of the US and EU in the first half of 2011, and released a report on Jonathan's Jonathan.

He found that the share of China's light manufacturing industry began to decline, from the previous 50% to 48%.

The beneficiaries include Bangladesh (exports to the United States increased by 19%) and Vietnam (16%).

When Anderson talked about the shift of labor-intensive manufacturing to Southeast Asia, he said that the first half of 2011 seemed "a very convincing turning point".

He said that in contrast, India and Philippines, which should have become labor-intensive investment "natural destinations", have become spectators in this process.

For Guangdong, China's most industrialized and wealthiest Province, the relocation of such low income jobs coincides with the initiatives of the provincial government for many years.

In the 12th Five-Year plan, Guangdong reduced its economic growth target to 8% per year.

Huang Huahua, governor of Guangdong province and Wang Yang, the Secretary of the provincial Party committee, have repeatedly stressed the need to move out polluting industries and strengthen the development of technology intensive industries.

Michael Enright, a professor at University of Hong Kong's University of Hong Kong business school, said that a provincial government actively sought to bid farewell to the early industrial development mode, which may be the first time in history.

The goal of the Chinese government is basically the same, but it is more difficult to achieve such a pformation at the national level, because the workers in the inland provinces are not as skilled as workers in Guangdong.

We need to get a deeper understanding of how fast the low-end manufacturing industries such as clothing and footwear are being evacuated from Southern China.

A group of data disclosed by Bruce Rockowitz, chief executive of Li Feng, actually indicates that the clothing, furniture and footwear manufacturing industry will usher in a new world order.

The purchase of a $16 billion market in Bangladesh has increased by 52%, while purchases from Turkey and Indonesia have increased by 20% or more.

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Li Jingpu (Roland Lee) owns a Hilford company that produces jeans.

In order to keep the company profitable in the fierce competition, he will reduce the order size to about 2000 pieces.

He also moved to the high-end market and increased the business of customizing products for Armani Exchange and other customers.

Li Jingpu said that cotton prices doubled more than last year, plus wage increases, prompting competitors to move their factories to India.

However, the high reject rate of clothing production in India made him somewhat vigilant.

Li Jingpu still put production in Shenzhen, where there is a 24 hour customs clearance between Hongkong.

Similarly, he will continue to produce high-end underwear and bra in Nanhai City, Guangdong, because the workers here are more productive.

There are many suppliers around the nickname "underwear capital".

China's close proximity to world-class infrastructure, higher productivity and huge population size means that it will continue to take a leading share in the manufacturing of jeans, clothing and toys, as revealed by Li Feng's announcement last month.

In the first half of this year, the production scale of Li Feng's suppliers in China increased by 30%, while more suppliers moved to lower cost inland provinces.

Yue Yu's public opinion quipped that the answer to China's "next destination" for global manufacturing is China.