Rising Wages In China Are Affecting More Manufacturing Companies And Returning To The Nest.

In recent days, US media said Donald Trump had been campaigning for the presidency, claiming that China is taking away the manufacturing industry in the United States.

In July 25th, the US media reported that Trump's view once had its merits.

China has a large number of workers, and its salary level is far lower than that of the US workers, which is very attractive to manufacturers who want to cut costs, increase profit margins and maintain low prices.

According to a study published in the Journal of labor economics, from 1999 to 2011, the United States lost at least 2 million jobs due to a surge in imports from China.

Raising wages of Chinese workers

However, in today's China, the outlook for workers is rather unsettling, not as Trump suggested.

As domestic economic growth slows down and production costs continue to rise, competition from foreign countries, including the United States, is intensifying, and they may lose their jobs.

In recent years, China's labor market has undergone dramatic changes.

With the development of China's economy, there are many opportunities in many industries. The attraction of assembly line work is not as attractive as it used to be.

So, in order to attract workers, managers have offered higher wages.

At the same time, local governments in Shenzhen and other industrial cities have been steadily raising the mandatory minimum wage standard so as to enhance the welfare level of workers and families and to encourage enterprises to produce products that are higher and more expensive.

Shenzhen is a coastal trade hub adjacent to Hongkong.

Reported that the above factors together push up the wages of Chinese factory workers.

According to the Japan Trade Promotion Agency, their monthly average wage is estimated at $424 (about 2831 yuan - Ben net note), which is more than 29% higher than three years ago.

Compared with many other emerging economies, China's current labor costs are much higher.

Workers in Vietnamese factories earn less than half of Chinese workers, and wages in Bangladesh and other countries are less than 1/4 of Chinese workers.

The rising cost of production has also greatly changed China's competitive position with the United States.

A study conducted by Boston Consulting Group (BCG) in 2015 showed that the manufacturing costs of China's main export processing zones were almost the same as that of the US in terms of salary level, worker productivity, energy costs and other factors.

More American companies are "returning to the nest"

The report said that because of the huge cost reduction, the benefits are gone, and more and more American businesses are "returning to the nest", that is, to move factories back to the United States.

According to another survey conducted by BCG in the US manufacturing industry last year, 24% of respondents said they were actively pferring production from China to the mainland, or planned to do so in the next two years.

In 2012, the proportion was only 10%.

This means that workers in American factories will get more job opportunities.

In the BCG survey, half of respondents said they expect to hire more manufacturing workers in the United States in the next five years.

It is not just the United States that takes jobs away from China.

Rising costs are pushing many industries in many industries to migrate production to other countries.

Stateside

On the shelf, you can often see products that are being moved from China to many factories.

In February this year, Hongkong based shoe manufacturer, Mike Cross, Yue Bu and other big foundry manufacturers, closed nine factories in China and pferred some of their production lines to factories in Vietnam and Indonesia.

The headquarters is also located in Hongkong, which is a garment manufacturer of American brands such as docs and Booker brothers. It plans to close a Chinese factory this year and pfer production to new factories in Vietnam and Ethiopia.

Other companies that have extensive businesses in China may not close their factories, but are seeking to invest elsewhere.

Although China's exports to the US still remain the largest in scale, it also faces more and more competition from cheaper Asian rivals.

A report released by Feng Feng research group in March this year showed that the market share of Chinese clothing exported to the United States decreased last year, while Vietnam and

The share of other countries has increased.

This is a research firm based in Hongkong focusing on supply chain and procurement research.

"China is not an attractive place for all low-cost jobs," said Gimoman, chairman of the Chinese American Chamber of Commerce in Beijing.

"China is moving towards the upstream of the value chain, which means that there will be adjustments."

Because China's economic growth is blocked, workers in the country are also facing difficulties.

Loss.

Chinese factory workers who have already been affected may face a more severe situation in the future.