coyotes_geek
01-17-2013, 11:14 AM
China Begins to Lose Edge As World's Factory Floor (http://finance.yahoo.com/news/china-begins-lose-edge-worlds-021100834.html)
BEIJING—China is losing its competitive edge as a low-cost manufacturing base, new data suggest, with makers of everything from handbags to shirts to basic electronic components relocating to cheaper locales like Southeast Asia.
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Total foreign direct investment flowing into China fell 3.7% in 2012 to $111.72 billion, the Ministry of Commerce said Wednesday, the first annual decline since the fallout from the global financial crisis in 2009.
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By contrast, foreign direct investment into Indonesia was up 27% in the first nine months of last year.
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Foreign capital helped build China into a low-cost manufacturing powerhouse and global growth engine. But its increasingly urban population now has higher expectations in terms of wages and working conditions and louder objections to the pollution that often comes with low-level manufacturing—demands that have eroded China's cost advantage.
China's leaders are moving to shift the economy away from its traditional reliance on low-end manufacturing and heavy investment spending, seeking to build a stronger consumer base at home. A breakdown of Wednesday's figures suggests a tentative move in that direction: While foreign direct investment in manufacturing contracted by 6.2% in 2012, investment in the service sector excluding the property market rose 4.8%.
"We know we can't keep relying on a low-cost competitive advantage. We need to accelerate the value-added upgrading of our products," said Commerce Ministry spokesman Shen Danyang at a news briefing Wednesday.
BEIJING—China is losing its competitive edge as a low-cost manufacturing base, new data suggest, with makers of everything from handbags to shirts to basic electronic components relocating to cheaper locales like Southeast Asia.
........
Total foreign direct investment flowing into China fell 3.7% in 2012 to $111.72 billion, the Ministry of Commerce said Wednesday, the first annual decline since the fallout from the global financial crisis in 2009.
..........
By contrast, foreign direct investment into Indonesia was up 27% in the first nine months of last year.
.............
Foreign capital helped build China into a low-cost manufacturing powerhouse and global growth engine. But its increasingly urban population now has higher expectations in terms of wages and working conditions and louder objections to the pollution that often comes with low-level manufacturing—demands that have eroded China's cost advantage.
China's leaders are moving to shift the economy away from its traditional reliance on low-end manufacturing and heavy investment spending, seeking to build a stronger consumer base at home. A breakdown of Wednesday's figures suggests a tentative move in that direction: While foreign direct investment in manufacturing contracted by 6.2% in 2012, investment in the service sector excluding the property market rose 4.8%.
"We know we can't keep relying on a low-cost competitive advantage. We need to accelerate the value-added upgrading of our products," said Commerce Ministry spokesman Shen Danyang at a news briefing Wednesday.