Rise of China manufactured products costs

Time: 2014-04-08    Writer: TAJ

Made-in-china costs rise due to the following 5 elements: labor force shrinking, salary doubling, china鈥檚 currency appreciation, land price increasing and bars for SME (small medium enterprise) to get loans from banks. Impact of the first 3 elements outweigh the last 2, so we鈥檒l only go for the first 3 factors in this article.

1.     Number of Young Labors are shrinking.

Pearl River Delta, a sprawling web of manufacturing cities that includes Dongguan, Shenzhen and Foshan, factories here can鈥檛 hire employees easily. A lighter factory has expanded workers age from 20 years old to 30, even 50,but it still can鈥檛 get enough labor.

 2. Salaries are doubling.

Increasing labor costs in recent years becomes one of the top concerns for Chinese manufacturing. China鈥檚 labor costs in the urban manufacturing sector in 2010 has been doubled from that in 2003. This represents a compound growth rate of 13.8 percent in renminbi (RMB), or 17 percent in dollars after taking RMB appreciation into account. China鈥檚 costs are growing at a faster rate than many other countries with low overall manufacturing costs, such as Vietnam, India, and Mexico. The biggest problem is the workers鈥 salaries are rising, but customers insist on the older price.

3. China鈥檚 currency appreciation.

  Being exposed to the cost-rising Chinese market, prices of TAJ lighters will be adjusted. But whatever the price is , quality of TAJ lighters is always excellent. 

  TAJ brand is being perfected, come with us to go through this  important and unique journey. 

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