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Rising wages-together with currency fluctuations and high fuel costs—are eating away the once—formidable“China price”advantage,p
Rising wages-together with currency fluctuations and high fuel costs—are eating away the once—formidable“China price”advantage,p
admin
2021-11-05
31
问题
Rising wages-together with currency fluctuations and high fuel costs—are eating away the once—formidable“China price”advantage,prompting thousands of factory owners to flee the Pearl River Delta.Much has been written about the more than doubling of wages at the Shenzhen factory of Foxconn,the world’s largest electronics contract manufacturer,which produces Apple iPhones and iPads and employs 920,000 people in China alone.“One can talk about a world pre—and post-Foxconn,”says Victor Fung,chairman of Li&Fung,the world’s biggest sourcing company and a supplier of Wal—Mart.“Foxconn is as important as that.”
Foxconn’s wage increases are only the most dramatic.Our analysis suggests that,since February,minimum wages have climbed more than 20 percent in 20 Chinese regions and up to 30 percent in some,including Sichuan.At a Guangdong Province factory supplying Honda,wages have risen an astonishing 47 percent.All this is bad news for companies operating in the world’s manufacturing hub,and chief executives should assume that double—digit annual rises-if not on the scale witnessed this year-are here to stay.
Looked at another way,however,wage inflation provides companies with a once—in—a—generation opportunity to rethink radically the way they approach global production-and they should do so sooner rather than later.
Why the urgency?After all,wage hikes in China are nothing new.Since 1 990,they have risen by an average of 1 3 percent a year in U.S.dollar terms and 19 percent annually in the past five years.
There are two big reasons the situation is different now.The first has to do with productivity. Over the past 20 years,productivity increases have broadly matched wage increase,negating their impact.The pay rises came from a very low base,so while average wages grew 19 percent a year from 2005 to 2010,this amounted to only ¥260 a month per employee,a sum that could be offset by more efficient production or switching to cheaper sources of parts and materials.
If labor costs continue,however,to increase at 19 percent a year for another five years,monthly wages would grew ¥623 per month,according to BCG estimates.Such an increase would ripple through the economy in the form of higher prices for components,business services,cargo—handling and office staff.
The second reason relates to societal change.Until now,it has been easy to lure a seemingly unlimited number of young,low—wage workers to the richer coastal regions and house them cheaply in dormitories until they saved enough to return home to their families in the interior provinces.In the future,though,young workers will be harder to recruit.This is partly because there will be fewer of them:Largely because of the country’s one—child policy,the number of Chinese aged 15 to 29 will start declining in 2011.Moreover,with living standards rising across China,fewer of today’s rural youth will want to go to coastal regions to toil for 60 hours a week on an assembly line and live in a cramped dormitory.
So what can CEOs do in this fast—changing environment?An instinctive reaction is to search for cheaper labor elsewhere.But this is short—sighted and would provide—at best—a short—term fix.Another option is to stay in China and try to squeeze out greater productivity gains.
On which of the following would the author most probably agree?( )
选项
A、Foreign investors should move their manufacturing capability closer to the consumer
B、China’s wage inflation will wreak a political havoc in the future
C、Foreign investors should flee to neighboring countries,such as Vietnam
D、There’s plenty of room to improve efficiency at Chinese plants
答案
D
解析
本题的关键句是try to squeeze out greater productivity gains。努力去挤出更多的生产成果。答案是D。在中国的工厂中有很多的余地可以提高效率。
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