Exodus of jobs from China to SE Asia
December 03, 2008
labor costs in China rise on tightened labor laws and the strengthening yuan,
Korean clothes makers that outsource production to China are turning their eyes
to Southeast Asian countries such as Vietnam.
Three officials of Tomboy
and Co., a local women’s casual wear maker, recently went on business trip to
Vietnam’s Hanoi and Ho Chi Minh City in order to find new factories to outsource
production of the company’s blouses and jackets, according to a spokesman. These
clothing items used to be produced in Dalian, China.
cost in China has surged 50 percent in this year,” said the spokesman, Lee
Jong-hwan. The company’s average monthly pay per worker in Dalian has risen to
the current 1,400 yuan ($203) from 1,000 yuan late last year, due to China’s new
labor laws, he said. In addition, the yuan has risen sharply against the Korean
won this year. China accounted for 58 percent of Tomboy’s production early this
year and the company plans to lower the percentage to 45 percent early next
Other local midrange clothes makers such as Shinwon Corp., The
Basic House Co. and E.Land are also moving their production bases from China on
“We have no other choice, because we cannot reflect the
cost hikes to product prices for fear of losing customers in the
already-freezing market amid the global financial turmoil,” said an official at
a clothes maker who refused to be identified.
“Vietnam is emerging as
the most competitive alternative now,” said Kim Young-sik, head of the
outsourcing division at FnC Kolon, a Korean sportswear maker. He visited the
country twice this year.
“We are collecting data about Indonesian
factories, as the country is said to have low wages and low tariffs,” said Choi
Won-gyu, an official at Yeshin PJ, a casual-wear maker.
Mi-jin JoongAng Ilbo [email@example.com]