Foreign investment in the manufacturing sector to increase manufacturing in China is competitive?

At present, the labor cost is equivalent to 40% in China, and the per capita wage in Bangladesh and Burma is only about 20% of that in china. Therefore, foreign enterprises in the choice of manufacturing centers, there are more choices. Japan's Trade Promotion Agency research shows that this year the number of Japanese companies have shifted to expand the factory.

The growth of household income is a key link in China's shift to a consumer driven economy, but it also puts pressure on low-end manufacturing. Statistics show that in dollar terms, China's labor costs rose by more than 60% since 2009. Therefore, foreign enterprises in the choice of manufacturing centers, there are more choices.

Japan's Trade Promotion Agency research shows that this year the number of Japanese companies have shifted to expand the factory. Among them, set up factories in China has 20 years of blood pressure maker OMRON, plans to move the plant back to japan. The company said that Japan's production costs in the past 10 times in China, although it is now more than 3 times, but has been able to provide profitable space. Although the withdrawal of enterprises directly to the plant is not much, but there are more and more foreign enterprises began to carry out China +1 plan, also is to have production line in our country at the same time, but also in other lower cost production line of new country construction.

The clothing brand is planned to drop from 75% to 60% in the rate of production of our products, and increase the production line in Burma. Agricultural Bank of China to songzuo chief economist, said in August 14th that foreign companies will be removed from the plant Chinese trend will continue in future, processing industry, or the labor intensive industry transfer to other lower cost countries the trend in recent years has begun.

He pointed out that in the past there is a necessity of the development of the global economy, is the gradient transfer, multinational industrial layout in the global scope, will be transferred to the production line of low processing cost locations, the factors to consider include the environment, resources, transportation and security, but the cost of labor is the most important factor. Xiang Songzuo said that from the beginning of the last century in 50s, the manufacturing industry began to transfer from the United States to Japan and the Asian "four tigers", Chinese after the reform and opening up, and began to Chinese transfer, Chinese accept transfer at the same time, also realized industrialization. Since the new century, Chinese workers wages rose sharply, coupled with the new "labor law" and the implementation of RMB appreciation, more and more manufacturing industry from the beginning of China transfer to Southeast Asian countries, it is not only the behavior of foreign companies, including Chinese local enterprises, belongs to the natural trend.

He believes that this trend will exert pressure on the Chinese, may make the employment of our country and some excessive dependence on the processing industry of local economic growth is facing pressure, but this pressure belongs to the historical trend, only managed to deal with. Looking to the future, the rising trend of China's income will continue. The government has proposed to achieve the goal of doubling the per capita income of urban and rural residents by 2020 than in 2010. According to the NDRC data, the first half of this year, the country has 22 regions to adjust the minimum wage, the average increase of more than 18%. In this regard, Xiang said, wage growth slowed down is a huge challenge for China's overall economic growth. He pointed out that one of the important indicators of economic performance is the growth rate of labor productivity.

The basic principles of Marx's economic theory show that the wage growth rate of workers can not exceed the growth rate of labor productivity. Over the past 30 years, China's labor productivity growth is very fast, far more than other emerging market countries, so wage growth is higher than these countries is a natural trend. But from the beginning of 2010, China's labor productivity growth is declining, which will inevitably lead to decline in wages of workers, has become one of the bottlenecks of China's future economic development. Xiang Songzuo believes that the current Chinese economy is about to shift to consumer driven growth period, while the growth rate of consumer wages is not enough to support this model, which involves the issue of income distribution system reform.