Update | Rising labour costs ‘dulling Guangzhou’s competitive edge’
Companies from Hong Kong and Taiwan are rethinking their commitment to Guangdong factories in favour of cheaper labour elsewhere
Rising costs at labour-intensive manufacturing factories in Guangdong are prompting companies from Hong Kong, Taiwan and abroad to relocate their operations to neighbouring nations, industry insiders say.
There's a lack of official data to show how many have moved, and local authorities say the area still faces a labour shortage.
But Wu Jenn Chang, the chairman of the Taiwanese-invested Enterprises Association of Guangzhou, said at least 30 per cent of Taiwan-invested companies had left Guangdong and moved to neighbouring countries in the past couple of years. The trend was likely to accelerate in the next two years, he warned.
Figures released on Tuesday by the Federation of Hong Kong Industries showed about 32,000 Hong Kong manufacturers ran factories in Guangdong, employing about five million mainland workers.
That contrasts to 2002, when more than 63,000 Hong Kong manufacturers ran factories on the mainland, mostly in Guangdong, employing more than 11 million.
Guangdong Governor Zhu Xiaodan said this week that reducing unemployment would be his government's top priority among livelihood issues. The government forecasts urban unemployment to rise to 3.5 per cent this year, from 2.44 per cent last year.