Rising costs of labour in China

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Paradigms

  • Decrease in attractiveness of China as a location for large-scale manufacturing investment
    • Shift to cheaper sites within Asia Pacific such as Thailand, the Philippines or India
  • Increasing importance of Total Cost of Ownership
    • More difficult for companies to successfully determine sourcing costs
  • The world's largest economy feeling the pains of inflation
  • Western countries such as the US will no longer be able to count on cheap Chinese imports to help control inflation

Timing

1979 Opening of Chinese economy to foreign investment
2004 First reported labour shortages
2008 Government enacts minimum wage legislation

Web Resources

  1. "Special Report: China's rising labour costs", Media Eghbal
  2. "China labor prices are rising - what it means for outsourcing", Bill Roberts
  3. "Experts differ on China's rising labor costs", People's Daily Online
  4. "How Rising Wages Are Changing The Game In China", Business Week
  5. "China's labour pains: rising wages", New Economist
  6. "Costs rising, China to export inflation", New York Times

Revision History

September 2009 Created by Gerrit Ledderhof
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