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English>>China Business

Expo gives evidence of manufacturing shift

By Wang Zhuoqiong  (China Daily)

08:13, September 27, 2012

Vietnam's booth at the China-ASEAN Expo in Nanning, the capital of the Guangxi Zhuang autonomous region. Businesses have been investing heavily in Southeast Asian nations, where labor costs and land prices are lower compared with China. [Photo/China Daily]

The Bangkok-based Chia Tai Group plans to redirect more of its agricultural investment from China to Association of Southeast Asian Nations, or ASEAN, countries, which tend to have lower labor costs and land prices.

The company's agricultural businesses export processed-food and farm products to European Union countries and the United States.

"Labor costs in ASEAN countries are 30 percent lower than in China, and land prices are 50 percent lower on average," said Luo Xing, executive of the Guangxi unit of Chia Tai Group's agro-industry business.

He said the company is investing heavily in Vietnam and other ASEAN countries.

Chia Tai Group is one of many international companies that have shifted some of their manufacturing business from China to neighboring countries in Southeast Asia in recent years. Worries about that shift have generally taken a back seat at the ninth China-ASEAN Expo, which concluded on Tuesday in Nanning, the capital of the Guangxi Zhuang autonomous region, giving place to a belief that China and ASEAN countries will cooperate more.

"There is a lot of room and potential for industrial cooperation," Su Bo, vice-minister of the Ministry of Industry and Information Technology, said at the China-ASEAN advanced-manufacturing development forum in Nanning on Saturday.

ASEAN countries are rich in oil and gas resources and are home to many rubber plantations. In 2011, China imported $39.7 billion worth of fossil fuels and rubber products from them.

The same year, ASEAN countries became China's fourth-largest market for exports of mechanical and electronic products, and the fifth-largest source of imports for China. The countries have also become an important destination for Chinese investments into the textile garment, toy, footwear and daily necessity industries.

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