In the next four or five years, the cost of manufacturing China will be comparable to that of the United States
Energy, raw materials, the export tax rebate adjustment, processing trade policies, labor costs, and factors such as the appreciation of the renminbi and barriers to trade has simply rely on price advantage of Chinese manufacturing industry faces very serious situation.
According to U.S. consulting firm AlixPartners, a new report estimates that by 2015, outsource manufacturing to China's cost and production cost is in the United States, China is no longer manufacturers to seek the goal of the lowest operating costs.
The cost advantage of manufacturing in China has shrunk significantly in recent years, said Steve aurer, executive director of AlixPartners. In 2005, the cost of landing in China was generally 25 to 30 percent lower than in the United States. Now, thanks to rising labor wages, a stronger yuan and the cost of foreign shipping, China is increasingly expensive to make. By analysis, two-thirds of the gap has now disappeared. If this trend continues, the cost of manufacturing in China will be comparable to that of the United States in the next four to five years.
As China continues to raise the minimum wage and wages have been rising steadily, competition for the labor force has forced manufacturers to raise wages to attract and retain workers, analysts say. Compared with a decade ago, wages in China have risen by 12 per cent a year, and the renminbi has risen 25 per cent against the dollar. If the yuan continues to appreciate, chinese-made goods will cost more to ship around the world.