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    Zhang Ping: Instead Of "Made In China", Can Southeast Asia Succeed?

    2014/2/14 15:20:00 58

    Zhang PingMade In ChinaSoutheast Asia

    "P" recently quoted manufacturers in Vietnam, Kampuchea and other Southeast Asian countries.

    In recent years, in order to save cost, many multinational enterprises have turned their eyes to low wages in Southeast Asia.

    However, the manufacturing industry in the region also has a worrying side: Bangladesh factory safety incidents frequently occur, the demonstrations intensified by Kampuchea workers demanding salary increase, and the new instability of Thailand's political situation has made international investors face major challenges.

    < /p >


    < p > in recent years, with the acceleration of RMB appreciation and the rapid rise of domestic labor costs, many pnational famous enterprises have moved their manufacturing enterprises in Southeast Asia to China in view of their own interests, hoping to replace the < a href = "http://www.91se91.com/news/index_c.asp" > made in China "/a" with cheaper production costs.

    But the actual experience made them complain incessantly.

    The author believes that although Kampuchea, Vietnam, Burma and other countries have great competitive advantages in terms of labor prices compared with China, it is not easy for Southeast Asia to become a world processing plant instead of "made in China".

    The low wages of Southeast Asian workers do not mean low manufacturing costs.

    < /p >


    < p > first, workers in Southeast Asian countries also have salary requirements.

    Taking the senior economic adviser of Kampuchea's prime minister, Kai Yan, as saying, with the development of Southeast Asian economy, the corresponding improvement of wage level is a natural process.

    In addition, many countries in Southeast Asia legally recognize the independence of trade unions and allow workers to negotiate prices with the management through strikes. With the reform and political liberalization of some Southeast Asian countries, workers' demands for wage increases will also increase.

    < /p >


    < p > in addition, some governments have asked the management to raise wages for workers for consideration of political stability.

    The labor law of Vietnam stipulates that foreign-funded enterprises should raise their salaries by 30% per year.

    In January 1, 2013, the Thailand government began to promote "300 Tai Zhu (about 60 yuan)" throughout the country. If the labor premium and overtime pay were added, the monthly wages paid by workers for each worker generally reached 8000 to 10 thousand yuan after the wage standard was raised, which made many labor-intensive enterprises complain incessantly.

    < /p >


    < p > moreover, social and political turbulence interferes with the normal production order of enterprises.

    Compared with China's stable social and political environment, the social unrest in Southeast Asian countries is uneasy, and the basic facilities such as electricity are not yet complete.

    Under such circumstances, few foreign enterprises are willing to invest in these countries, so it is still a myth that Southeast Asia wants to really replace "made in China".

    < /p >


    < p > in recent years, due to the United States pursuing the policy of loose a href= "http://www.91se91.com/news/index_c.asp" and "monetary policy < /a > (QE), the flood of liquidity flows to the emerging economies, which makes the Southeast Asian countries hyperinflation.

    Since 2013, Indonesia's inflation rate has increased by more than 10%. The government has also raised the fuel price by 44%, and the price of land and electricity has increased considerably.

    Under such circumstances, it is bound to arouse strong discontent among the people in the lower and middle classes, thus constantly detonating demonstrations and strikes that require minimum wage increase.

    The unstable political situation and social turbulence will directly lead to heavy losses for foreign investment enterprises.

    < /p >


    < p > finally, the efficiency of workers in Southeast Asian countries is low, and cheap labor is not enough to replace Chinese manufacturing.

    The author believes that the cost of manufacturing in Southeast Asia will surpass China, which depends on the productivity level.

    At present, China's productivity and economies of scale are generally better than those of Southeast Asian countries.

    During the 2000-2013 years, Indonesia's wages rose by 5.5% on average, while productivity increased by only 3.4%.

    In the same period, China's wages rose by an average of 7.2%, but productivity increased by 10.1%. Obviously, the wage space of Chinese workers is more sustainable than that of Indonesian workers.

    So relying solely on cheap labour is not enough to replace China.

    < /p >


    < p > in addition, many enterprises have pferred the "a href=" http://www.91se91.com/news/index_c.asp "production line < /a" to Vietnam, Indonesia and other countries in Southeast Asia. But after investing in Southeast Asian countries, it is found that low wages do not mean low manufacturing costs.

    Take the textile industry as an example, at present, the skilled workers in the first-line textile factories in China are paying 2800-3000 yuan per month.

    In Vietnam, the average monthly wage is 2000 yuan, but the efficiency of the staff is about 20% lower than that of the domestic market.

    It can be seen that the labor skills and quality of workers in Southeast Asian countries need to be improved compared with those made in China.

    < /p >


    < p > Western newspapers and periodicals once asked: is it possible to replace "made in China" in Southeast Asia? In fact, although "made in China" is at a critical moment in the pformation and upgrading of industrial structure, it has an incomparable advantage compared with those in Southeast Asian countries. Besides the political stability of the society and the complete infrastructure of the city, the quality and productivity of Chinese workers are much higher than those of emerging economies in Southeast Asia, so China's "world factory" status is unshakable for a long time to come.

    But at present, China's manufacturing is still in the middle and low end, and there is still a long way to go to catch up with the Western high-end manufacturing industry.

    < /p >

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