Can Southeast Asia Replace China As A New World Factory?

According to media reports, since 2008, Southeast Asia has diverted 30% orders from China, which has had an impact on 19 million footwear industry practitioners in China. China Nonferrous Metals network. CEIC global economic database shows that clothing and textiles account for 9% of Vietnam's manufacturing industry. Currently, Vietnam actively participates in the TPP negotiations led by the United States, and is affected by this policy. Foreign investment is actively flowing into Vietnam's garment industry. China Nonferrous Metals network.

Data also showed that in the first quarter of this year, US imports of tablet and notebook computers from China decreased by 14% compared with the same period last year, while the import volume from Vietnam increased by more than one million.

Samsung mobile giant set up a new factory in Vietnam last year. It is expected that Vietnam will produce more than 40% Samsung mobile phones by 2015, and this figure is expected to reach 80% in the future.

Besides, it is cheap. Wage price It is also one of the factors to enhance competitiveness in Southeast Asia. China Nonferrous Metals network. At present, the wages of workers in the eastern coastal areas of China are about 500 dollars, Indonesia is about 300 dollars, and Vietnam is about 250 dollars. China Nonferrous Metals network. The lowest monthly wage of the workers in the clothing industry in Kampuchea is only 80 dollars, while another major producer of clothing, Bangladesh, raised the minimum monthly wage to $67 at the end of 2013.

But Southeast Asia's advantages in price are also facing challenges. China Nonferrous Metals network. And the uncertainty of economic fundamentals has deterred investors.

　　 Southeast Asia Disadvantages continue to highlight

Sharon Yeung, an assistant researcher in the Global Research Institute of the world economics and Politics Institute of the Academy of Social Sciences, said that the competition between China and Vietnam is clearer because of their similarities with Vietnam's export structure. China Nonferrous Metals network. Influenced by Vietnam's recent violence against foreign investors, business environment in Southeast Asia has been shadowed.

Sharon Yeung analysis believes that Vietnam faces two major economic slowdown factors. China Nonferrous Metals network. On the one hand, domestic inflation is serious. Although the inflation rate has dropped to 6.6% in 2013, it has seriously affected the confidence of domestic consumers and enterprises, resulting in weak domestic demand. On the other hand, the external demand shocks made the export of Vietnam's GDP close to 100% slower.

But in Vietnam, there are foreign countries. Investor The violence is not the first instability in Southeast Asia. China Nonferrous Metals network. Beginning in mid April, 30 workers in two Kampuchea special economic zones began to strike, demanding bonuses and increased wages. China Nonferrous Metals network. According to statistics from Kampuchea, the strike has caused about $275 million in losses to the whole industry.

In November last year, political turmoil broke out in Thailand, leading to a number of car manufacturers threatening to withdraw from the country.

Apart from political instability, the economic fundamentals of Southeast Asian countries are also easy to fluctuate. China Nonferrous Metals network. In 2013, 5-6, emerging economies such as Thailand, Indonesia and Malaysia broke out of the exchange rate crisis. Then Vietnam launched an exchange rate crisis in January 2014.

Liu Hongwei, a clothing retail expert and partner of Beijing longitudinal management consulting group, said that China's population base is relatively large. In the past, it has been decades of time to digest the pressure of rising costs, while Kampuchea and Vietnam have relatively few population, and human labor costs may rise rapidly in recent years.

　　 Can Mexico manufacture challenge China?

Mexico, India and other emerging market countries also rely on low prices and stable economic situation to become an area favored by investors. China Nonferrous Metals network. In particular, Mexico has become the best investment destination for exporters whose main destinations are the US market.

Nissan and Volkswagen became the first brands to enter Mexico. China Nonferrous Metals network. Nissan has become Mexico's largest automaker. China Nonferrous Metals network. Ford and Honda have also intensified their efforts to build factories in Mexico in recent years.

Mexico has gradually shown its advantages in terms of labor costs. China Nonferrous Metals network. In 2002, Mexico's wage level was nearly 4 times higher than that of China, but by 2012, the gap between the two sides had dropped to 29%. China Nonferrous Metals network. In the last 3 years, Mexico's wage level is likely to be surpassed by China. China Nonferrous Metals network. More than half of the 112 million of Mexico's population is less than 29 years old, so the country will have abundant cheap labour until at least 2028.

But that does not mean that Mexico and other countries can take the place of China as a new world factory. China Nonferrous Metals network. The central and western cities of China are increasing their efforts to attract large manufacturers. Labor force in many areas is still abundant, and labor costs are not higher than those in Southeast Asia. For example, Guizhou has a monthly salary of 1500~1600 yuan, which is equal to the labor cost of Vietnam.

China's leading position in infrastructure construction is also obvious. China Nonferrous Metals network. From the point of view of logistics facilities, as of 2013, the world's top 20 airports accounted for 7 seats in the world's largest tonnage, while the United States accounted for 7 seats, and none of them was in Mexico. China Nonferrous Metals network. The world's top 20 ports, China occupies 9 seats, and the United States, Japan and Australia account for two seats, and none of them is in Mexico.

Wall Street analyst Lei Yang believes that a logistics facility is not well developed, and that only trucking countries are doomed to no way to become the world's factories. China Nonferrous Metals network. In addition, Mexico is also threatened by worsening public order.

At the same time, China itself is also promoting the upgrading of manufacturing industry. China Nonferrous Metals network. In the 1-4 month, the actual use of foreign capital in manufacturing equipment, computers and other electronic equipment manufacturing industry was 2 billion 430 million US dollars, an increase of 8.8%, which is better than the growth rate of FDI absorbed by the manufacturing industry, and faster than the overall FDI growth rate. To a certain extent, it reflects that China's development and upgrading of high-end manufacturing industry still has strong attraction for foreign investment.