Slowly but Surely

I believed it would come some day and it appears it is finally here:

Rising wages cause manufacturers to look outside of China.

In a front-page story, the New York Times (6/18, A1, Bradsher) reports that, though "China remains the most popular destination for foreign industrial investment in the world, attracting almost $83 billion" in 2007, "a growing number of multinational corporations are pursuing a strategy that companies and analysts call 'China plus one,' establishing or expanding Asian bases outside China, particularly in Vietnam." Manufacturers' concerns about China include "inflation, shortages of workers and energy, a strengthening currency, changing government policies, even the possibility of widespread civil unrest someday." The deciding factor, however, is that "wages in China are rising close to 25 percent a year in many industries, in dollar terms, and China is no longer such a bargain." China is "running low on able-bodied young workers to send to factories," causing wages to rise "more than 10 percent a year for many assembly-line workers. And pay is rising even faster for skilled workers, like machinery repair technicians."

[news letter from the Society of Manufacturing Engineers - June 18, 2008]