Malaysia Hotline: +603- 2141 8908
According to a study released by
Standard Chartered bank, ASEAN is poised to become Asia’s next low-cost
manufacturing powerhouse as wages in China’s Pearl River Delta (PRD) factory
belt continue to creep up.
As China sees waning wage
competitiveness, ASEAN stands to gain, with its lower costs and abundant supply
of labor over the next 20 years. ASEAN’s high rate of GDP growth, and rising
household affluence, means companies relocating from the PRD could capture a
share of a large and growing consumer market.
According to a study released by
Standard Chartered bank, ASEAN is poised to become Asia’s next low-cost
manufacturing powerhouse as wages in China’s Pearl River Delta (PRD) factory
belt continue to creep up.
As China sees waning wage
competitiveness, ASEAN stands to gain, with its lower costs and abundant supply
of labor over the next 20 years. ASEAN’s high rate of GDP growth, and rising
household affluence, means companies relocating from the PRD could capture a
share of a large and growing consumer market.
At the macro level, this is good
news for China, as maintaining a stable labor market and healthy income growth
are priorities for Beijing. Rising wages reflect the country’s improving
productivity and the increasing complexity of the products it makes. It
confirms China’s transition to high-end manufacturing and a more sustainable
growth model. At the company level, however, labor shortages mean more cost for
PRD manufacturers.
Vietnam is poised to be one of
the biggest beneficiaries, as low-costs manufacturing shifts away from the
Pearl River Delta. As China’s manufacturing sector transforms, ASEAN’s is
likely to grow. While wages may still be competitive in some parts of China,
particularly the West, the shrinking labor force means that wages are likely to
catch up quickly with those in Eastern China.
As a whole, ASEAN has strong and
varied manufacturing capabilities – from low-cost factories in Cambodia, Laos,
Myanmar, Vietnam and Indonesia, to mixed manufacturing and electronics in
Thailand, Malaysia and the Philippines, and high value-added production in
Singapore.
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
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