Above the fold news today in Hong Kong's South China Morning Post business section is that Foreign Direct Investment (FDI) to Suzhou was up 28.6% yoy totalling US$4.05 bn. Shanghai managed US$3.84 bn a 15% increase.
The story goes on to suggest that Shanghai is losing its competitiveness due to higher (and rising) labour costs than other cities in the Yangtze River Delta. Examples noted:
- 3M is reported as constructing its 5th PRC plant in Suzhou Industrial Park
- Unilever is reported to be moving some production to Hefei, capital of Anhui province to reduce production costs by 30%.
I have observed similar trends in the Pearl River Delta. The developing (and more remote) provinces are offering incentives (ranging from lower taxes to cheaper electricity) and reputedly have lower cost (and arguably more stable) labour forces. Counting against them is the longer distances to travel to reach coastal ports. As international businesses look more to the domestic market in the PRC perhaps reaching the port becomes less of a factor. For a 30% saving maybe you can wait an extra day or so in transport?
Very nice site. Will sure visit again.
Posted by: Very nice site. Will sure visit again. | November 24, 2005 at 08:58 PM