Executive Briefings

Days of Coastal China as Hub for Low-Cost Manufacturing May Be Quickly Coming to End

At one of those factories in an industrial suburb of the southern Chinese city of Guangzhou, a worker uses a sewing machine to stitch together black padding for an orthopedic foot brace. Across the aisle from her, others snip loose threads off disposable cushions for operating tables.

Later this year, these jobs will be gone as Guangzhou Fortunique's American owner, Charles Hubbs, moves a large chunk of production to Southeast Asia. "I don't know of any factory in China that can absorb both the raw material prices we have, the labor issues we've been looking at and the renminbi," China's strengthening currency, said Hubbs.

He's joining a wave of export manufacturers, big and small, that are moving from China's coastal manufacturing regions to cheaper inland provinces or out of the country altogether, in a clear sign that southern China's days as a low-cost manufacturing powerhouse are numbered.

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At one of those factories in an industrial suburb of the southern Chinese city of Guangzhou, a worker uses a sewing machine to stitch together black padding for an orthopedic foot brace. Across the aisle from her, others snip loose threads off disposable cushions for operating tables.

Later this year, these jobs will be gone as Guangzhou Fortunique's American owner, Charles Hubbs, moves a large chunk of production to Southeast Asia. "I don't know of any factory in China that can absorb both the raw material prices we have, the labor issues we've been looking at and the renminbi," China's strengthening currency, said Hubbs.

He's joining a wave of export manufacturers, big and small, that are moving from China's coastal manufacturing regions to cheaper inland provinces or out of the country altogether, in a clear sign that southern China's days as a low-cost manufacturing powerhouse are numbered.

Read Full Article