Foreign Investors Should Be Aware of Labor Strike Tactics in China

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By Vivian Ni

Nov. 29 – Increasing labor costs have become a major concern for foreign companies mulling whether or not to invest in China, but this may not be the only labor-related issue they should be watching out for. As the recent global economic downturn brings about falling factory orders, an abundance of young, well-educated and computer-savvy Chinese workers are leading one of the country’s strongest waves of labor unrest and labor disputes, which could cause real damage to companies’ regular day-to-day operations.

Intensified labor unrest
Over a one-week period in mid-November, more than 10,000 workers in Shenzhen and Dongguan – the two leading export hubs in South China’s Guangdong Province – went on strike. Continue reading…

The United States: A New China Alternative?

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By Vivian Ni

Nov. 3 – China is gradually shifting away from its position as the world’s default production base for manufacturers. In this country, factor costs are surging and government incentives for foreign investors are diminishing, forcing more and more companies to seek new and attractive destinations where they can relocate their factories. While emerging Asian countries boasting low overhead costs – such as India, Vietnam, Thailand and Indonesia – are undoubtedly attracting mounting attention, the United States is also growing back into an increasingly reasonable option for manufacturing, according to an intensive study conducted by the U.S.-based advisory firm The Boston Consulting Group (BCG).

The BCG report, which suggests manufacturers take “a hard, fresh look” at the United States, pointed out that China’s manufacturing cost advantage over the United States is shrinking fast due to Chinese labor becoming more expensive and local currency gaining value while productivity is not catching up as rapidly. When making their investment decisions, investors should take total costs – rather than only labor costs – into consideration and choose manufacturing locations based on product-by-product analyses. Continue reading…

Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

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