Vietnam and Thailand woes cause firms to seek new plant locations
Hong Kong Shippers' Council chairman Willy Lin Sun-mo says manufacturers based in the Pearl River Delta are running out of alternative, low-cost factory locations.
Hong Kong Shippers' Council chairman Willy Lin Sun-mo says manufacturers based in the Pearl River Delta are running out of alternative, low-cost factory locations with ample labour following recent instability in their two preferred destinations, Vietnam and Thailand.
The managing director of fabric maker Milo's Knitwear is watching for after-effects of recent, violent anti-Chinese protests in Vietnam that have affected trade ties and hundreds of Hong Kong-, Taiwanese- and mainland-owned factories in the country.
Some Chinese workers died in violent protests in Binh Duong province, near Ho Chi Minh City, while hundreds were injured. The rioting left behind burnt factories and shattered windows.
Relocation is not about a factory, but is about the supply chain
Lin said investment confidence had taken a battering from the protests and riots that broke out on May 13, with production at some factories still paralysed.
"A couple of years ago, the question was whether to leave China or not," Lin said. "Now, the question is where to go."
Countries with lower costs, such as Bangladesh, Thailand, Vietnam and Indonesia, are popular with manufacturers in labour-intensive industries, even though they face occasional strikes for better pay and welfare.
Lin said manufacturers might be better off staying in Dongguan if the problems caused by a shortage of labour, such as soaring wages, could be resolved through vocational training and increased automation.