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  • T"rehoffiffi Fi: Transforming Giant's Industries Factory. Garnaut Reports From

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    Rising costs in China are transforming its industries and role as the world's low-cost factory. Factories producing goods for companies like Adidas are facing higher wages, materials costs, and rent, squeezing their margins. While some manufacturers are moving production to even lower-cost countries, others are pushing costs up the chain to consumers by reducing inputs or increasing prices. The economic order is turning as China exhausts its supply of cheap labor.

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    Rising costs in China are transforming its industries and role as the world's low-cost factory. Factories producing goods for companies like Adidas are facing higher wages, materials costs, and rent, squeezing their margins. While some manufacturers are moving production to even lower-cost countries, others are pushing costs up the chain to consumers by reducing inputs or increasing prices. The economic order is turning as China exhausts its supply of cheap labor.

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    15 views1 page

    T"rehoffiffi Fi: Transforming Giant's Industries Factory. Garnaut Reports From

    Uploaded by

    nguyetnguyen2204
    Rising costs in China are transforming its industries and role as the world's low-cost factory. Factories producing goods for companies like Adidas are facing higher wages, materials costs, and rent, squeezing their margins. While some manufacturers are moving production to even lower-cost countries, others are pushing costs up the chain to consumers by reducing inputs or increasing prices. The economic order is turning as China exhausts its supply of cheap labor.

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    Rising inflation.uld wage costs are transforming


    the Asian giant's industries and its.role as
    the
    worfd's low-cost factory. John Garnaut
    reports
    from Shanghai.
    he worldt second largesr For thousands of small and multinadonal
    PoryTtrr^Sprr{pany ad id as, manufacturers the story is the .ame- fo.
    ts Coffroffuiga new and un_
    erpecred problem- The costs !h.-, the world economic order is turning on
    its head.,*r,'-..
    of labour,-materials and rert
    *tinn"
    rit- jqg spiralling upwards
    _t49 are spiraltring . The endless, seemingiy indomitable factor-
    res Lhat stretch from the Hong Kons border
    - ul rts grear production heart- north up the pearl River deha Tn G";"i;"g
    Iand in so'*hern Chinl.
    province and through ttre coastal p."ftrr.d
    lLustd to be that money made the rules oI Lluna are-choking on their ow-n succ"*s.
    But a grow-ing proportion of manufac_
    aPq Dru-ltrnatios"ls such as adidas turers are steeiing themselves to push their
    could ney have exhausted vdrat was thoueht to be
    r
    ertrart-a better deal Uy-G.*,;;i"i nsrng costs throuqh ro the frnal siop on the
    :gD
    t9 m3:e_offshore. T'he company *r,. g bongnLtes,s barrel of ch.ap taUorii. il;; productton chein: ih. colsumers.
    thd 2so factories hers ,ft;;.l 'In? *o.f have erecred rheir sheds on rhe #ur"ni
    About 1Li0 nrilior, patrs of shoes and
    clothing .;.h furmland that is cheaply available. m,'"V h*" 125 rnjllron ;arrrr::r: ,rere sourced in Chrna
    E.!o.y employs 3OOO people. o-, devoured so mucb oit corton, rubber, coa_l
    ryeragg while everyln"" fa.t,o.y
    r:ftl f,J;;";;
    Dy.adtdas la-v ye:,. nf,r, h says it rs padiing tp
    timeS tiat n.rnber.- iulo sreel that cornmodiry prices have re_ a large pa.rt of ;rs Ch.ine-se producrion "ani
    p"r1d *suonger for longef-than th. wo;a pov1ng rt to the countrl,/s lower_wage
    1,*;
    - . Brn the Chinese Governme# is 'po
    loneer
    E"*, And they *. -pidiy tiog,p bt[
    ba\ g=r*iffioduced
    \,BS
    _. I h"s, r."mty 4tr1i"h.g/.r*;";
    b_31
    '"fr- China's- polirical tolirance for ii.ltins"thl
    lop.sucaly c.halJengng inl-"rla p.oui"G ft,.
    t"rehoffiffi;fi
    r&urftnrflr and in€reased the.minimum **! rLy and waterwaJn *i* t"*1. r,"i"J- €ompany r.^nU ncl re,.-cal any price.rlse plars.
    "We jmmediari
    wage - have no plans to ihung"
    - production margux eyen tighter,
    sqrr€€zing Inere are Do more obvious corners to cut tle pricing.policy of our pro,i".t ,. ,"y, a"i" I
    and fe]v lgnrajning efficiency
    S"i* J "i
    (
    r:ne rnttage coming from local govern_ Puu, the hea'i rf :Jr,ras corporale pubhc
    - andTo-a--Iessef extent tf,. ?"nt*t
    rract. Irw-end manufacnrrers are shutrinc relations at head ofhce in Germanv.
    (

    /f T]egla
    Sovemrnent is veffEElr_-Fsrl"s wiiii;;
    down or moving out. A Hong K"ns b"-ri-G
    assooarion daims 3OOO factories have shur
    Bur other I,Ju-11.agc manufact'urers are t
    nln-^ Andersoru-the head'of S".i"f ma}UnS tnelr tni( rri',,ns .lear. They are mov_
    -
    ulLo
    ,91*-33* at adidas. ",ij ;;;;;:
    ..L"/.;;;;
    down in the Pead River deha rhi" t;.- Th;
    G.uaagdong local rnei;e 15;n11 of r"'p"ru
    ing skimping on inpurs an<1 fighting as ro grve
    c
    C]
    dodt tdl us about your p.ril;;; ;6}# consumers sorne of rherr pricing piin.
    pictures of newly abandoned factory n;;-- "rrd "The consumer. our customers. d
    d*-.-.-.-{ i=t.b., have

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