Date Created: 31 September 2017
Foreign business exiting China and moving their factories to South Asian countries such as Thailand, Cambodia and Indonesia.
Back in the 70s, China was very welcoming to foreign companies offering them all sorts of tax discounts and corporate benefits. The government saw it as an opportunity and easy path to develop the country without having to invest hugely into the business themselves. Panasonic was the first foreign company that established their factory in China, in 1979. But after 37 years of production they decided to stop all their TV production lines and leave the country. Similar situations apply to Sony, BestBuy, Marks & Spender, L'Oreal, Revlon and more. Nike and Adidas became the latest additions. What's the reason behind those corporates to give up China? Increase in cost is one of the concerns, less urge from the country to rely on foreign business to support its already mature economic strength could well be the main reason behind. As a result, Chinese government are gradually withdrawing benefits designed for foreign investors and cooperates.
China is know to be manipulating and suppressing it's currency to maximize its chance of winning bids in factory deals. However, it is inevitable to have a raise in production costs over the years. On the other hand, the country has been developing so rapidly over the recent decades, the economic growth allowed some of the citizens to enjoy first class lifestyle in sync with the rest of the world. Having these factors in mind it is difficult to continue lowering the currency strength without consequences. As once the manufacturer of the world, it is not hard to spot the game changing evidence in budget stores like H&M and Primark's. "Made in Romania", "Made in Thailand", "Made in Cambodia"... has replaced the one and only "Made in China" tags that once dominated the retail market in western world.
From clothing to furniture, your daily and household items may consist of 99% Chinese blood, but how much do you really know about China beyond that? Can you see the Chinese culture through your thoughtfully manufactured and assembled Apple or faux fur coat or bedside table? Read more about western ideas of Chinese culture.
Hyperlink:
A Signal to upcoming changes in "Made in China"? (CN)
http://sydc.sina.com.cn/zhuanti/qygc09/index.shtml
Why do foreign companies close its factories and shops in China? (CN)