Rising Costs Drive Some Chinese Manufacturers to Hinterlands — or Out of China Altogether

For manufacturers in China, “business as usual” no longer exists. Just one year ago, according to the 2007-2008 China Manufacturing Competitiveness Survey, conducted by the American Chamber of Commerce in Shanghai and Booz & Company, the main concerns of manufacturers in China were the rising costs of labor, raw materials and land, and the growing strength of the renminbi. Those factors were forcing some manufacturers to move to the country’s hinterlands, while others moved to Vietnam, India and other locations where land and labor are cheaper. As a production base, the 2007-2008 report concluded, China was losing its competitive advantage. For more, read this report from China Knowledge at Wharton.