China Outbound: Cost Considerations Boost ASEAN and India’s Manufacturing Advantage
Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia
In this edition of China Outbound, we highlight the impact of growing labor costs in China and consider the many solutions available to China-based manufacturers, including the benefits of a China +1 strategy, the implications of adapting your enterprise to meet the country’s evolving consumer market, and the competitive advantages found throughout ASEAN and India for manufacturing operations. Understanding the benefits of regional FTA agreements and grasping the region’s shifting cost structures is more important than ever as Asia’s emerging markets rapidly adapt to production and consumer demands.
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In this issue of Asia Briefing Magazine, we explore several of the region’s most competitive and promising manufacturing locales including India, Indonesia, Malaysia, Singapore, Thailand and Vietnam. Exploring a wide variety of factors such as key industries, investment regulations, and labor, shipping and operational costs, we delineate the cost competitiveness and ease of investment in each while highlighting Indonesia, Vietnam and India’s exceptional potential as the manufacturing leaders of the future, a trend fueled by China’s increasing labor costs and growing consumer market.
In this issue of India Briefing Magazine, we outline the fundamentals of India’s import policies and procedures, as well as provide an introduction to the essentials of engaging in direct and indirect export, acquiring an Indian company, selling to the government and establishing a local presence in the form of a liaison office, branch office, or wholly owned subsidiary. We conclude by taking a closer look at the strategic potential of joint ventures and the advantages they can provide companies at all stages of market entry and expansion.
For some time now, rising labor costs in China have been setting off alarms among foreign investors. In this article, we look at the obstacles these rising wages pose, as well as consider the opportunities that have arisen in response, such as the ASEAN-China free trade agreement, which allows companies to reposition manufacturing to other low cost areas of Asia or develop a China +1 strategy for their manufacturing operations.
As low-cost production moves away from China and into other Asian nations, China-based manufacturing enterprises will need to adapt their focus to remain relevant in the country’s market. In this article, we review the economic potential and procedures for expanding the business scope of your manufacturing WFOE in China to also include distribution in order to serve the region’s growing consumer market.
The new Indian Budget for fiscal year 2014-15 was presented this month – while many commentators have concentrated on the lack of significant changes in the existing tax regime, there are a number of interesting pointers that foreign investors would be wise to track, including several incentives for infrastructure, energy and communications investment.
India’s special economic zones (SEZs) have greatly enhanced the country’s export capability, according to statistics released by the Ministry of Commerce and Industry this July. Since the enactment of the SEZ Act in 2005, formal approval has been granted to 565 SEZ projects and a total of 185 SEZs have successfully begun exporting from India, with the SEZs’ share of Indian exports rising from 24.86 percent in 2011-2012 to 26.10 percent in 2013-2014. As china-based enterprises look to expand their production capacity elsewhere in Asia, India’s special economic zones will continue to be a prime alternative.
China’s Pearl River Delta, long known as one of the key factory centers for the world’s manufacturers has now become too costly for many companies to stay in the region, according to a survey conducted by the Chinese Manufacturer’s Association of Hong Kong. With labor costs averaging only 50 percent of those in China, Vietnam is quickly becoming a key manufacturing destination in the region, especially for those with a China +1 strategy.
Rising costs throughout the Asian region, and in China particularly, are driving businesses to look elsewhere for their sourcing partners. Vietnam has emerged as a prime location for foreign companies seeking lower cost sourcing solutions, and for good reason. In this article, we review the key advantages Vietnam has leveraged to become the best sourcing destination in Asia.
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Established in 1999, Asia Briefing Ltd. is dedicated to providing individuals and enterprises with the latest business and regulatory news as well as expert commentary relating to conducting business in emerging Asia.
ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam), ASEAN Briefing aims to be the premier online source for technical and business information concerning investment and trade with ASEAN countries and includes downloadable copies of all ASEAN and member country double taxation and free trade treaties held with China. The newest ASEAN business guide, “Doing Business in Singapore 2014 (Second Edition),” is available as a complimentary download in the Asia Briefing Bookstore.
India Briefing has developed into a premium source for insight on doing business in India. It publishes business news concerning foreign direct investment into India, including the most important tax, legal and accounting issues. You can download a complimentary copy of our latest edition of India Briefing Magazine, “Passage to India: Selling to India’s Consumer Market,” in the Asia Briefing bookstore.
Vietnam Briefing is one of the few available sources for quality legal, tax and investment insights into Vietnam. Vietnam Briefing publishes a wealth of information contributed to by on-the-ground business professionals in Vietnam. The newest Vietnam business guide, “An Introduction to Doing Business in Vietnam 2014 (Second Edition),” is available as a complimentary download in the Asia Briefing Bookstore.
Dezan Shira & Associates
Meet the firm behind these publications. Dezan Shira & Associates is a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the award-winning firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam, in addition to partner alliances in Indonesia, Malaysia, Philippines and Thailand, as well as liaison offices in Italy, Germany and the United States. For further information, please email email@example.com or visit www.dezshira.com.
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