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Chinese manufacturing will not lose edge soon despite rising labor cost: scholar


08:30, December 19, 2012

SINGAPORE, Dec. 18 (Xinhua) -- China will not lose its competitiveness in the manufacturing sector any time soon despite the rising labor cost, said Zheng Yongnian, director of East Asian Institute, National University of Singapore Tuesday.

Speaking in Singapore on Tuesday on the investment opportunities in China's inland west, Zheng said that, while some companies relying on cheap labor are indeed moving out of China, most manufacturing firms leaving the coastal east are actually moving within China to the central provinces and the inland west.

There are even some companies moving "from the Pearl River Delta to other poorer areas" within the province of Guangdong, Zheng said.

The companies chose to stay in China because the labor cost advantage is still there in the provinces in the central and western parts of China. They are "not prepared" to move to other places where the infrastructure was not comparable to those in China, he said.

It is also important for the companies to be able to source components from nearly places, as has been the case in some parts of China, Zheng added.

A report jointly released by the East Asian Institute, led by Zheng, and the West China Development Research Center, Sichuan Academy of Social Sciences, China, said that the investment opportunities inland west is attracting more and more international companies, including the Singapore firms which have been expanding fast to China's inland west.

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