5 ms·

Out of curiosity, how much of this is due to import tarifs and how much due to rising wages?

sambroner 7y ago
It feels like a lot of it is due to the publicity around the tariffs. The cost alone isn’t enough to make corps shift, but assuring the stock market that the Corp is robust against continued tariffs and possible unrest appears to be worthwhile. There seems to be some combined anti-China, pro-anywhere-else marketing involved as well.
- panpanna 7y ago
  But hasn't there been talk of moving from China to India/Vietnam for some years now? Did any of that actually happen or was it just talk until now?
  - Rapzid 7y ago
    A lot of countries including Nintendo have moved and are moving to "Southeast Asia".. Okay so sue me for not reading the article first; Nintendo is mentioned. Giant is another. Not sure how widespread it is but it's real.
- toasterlovin 7y ago
  You’re joking, right? 25% increase in cost of goods sold is the only reason needed to move. I’m the CFO of a small company. We moved production out of China and into Taiwan and Vietnam. Despite labor being cheaper in Vietnam, our costs went up by 10%. We moved anyway because 10% < 25%.
baybal2 7y ago
Chinese manufacturing industry is already the most automated and robotised in the world. Chinese factories did not stand still for the last 10 years when accommodating the rising wages was their biggest trouble. This is very obvious to anybody working in the industry. The popular image of the industry being all about "sweatshops" is completely wrong.
- the_resistence 7y ago
  Not from my vantage point, I have many young contacts at companies in Shanghai. Lot of job cuts and putting 3 workers' efforts onto the head of the last remaining 1. Plenty of manual labor left...
  - baybal2 7y ago
    Ever been to factories of Chines white goods manufacturers? Haier, Midea (technically same Haier), Gree, Noritz and many others? None were "lights out," but I can say that the labour does not contribute more than 10% of their cost for them.
- seanmcdirmid 7y ago
  That simply isn’t true. Unless you are using the superlative in a weak sense. For example, the reasons why Toyota’s are crap in China vs being quality everywhere else is because Chinese auto plants aren’t as automated as those in Japan and North America. China is definitely in the process of automating, but it is nowhere near where Japan is, or even the USA (not to mention Korea and Taiwan).

It feels like a lot of it is due to the publicity around the tariffs. The cost alone isn’t enough to make corps shift, but assuring the stock market that the Corp is robust against continued tariffs and possible unrest appears to be worthwhile. There seems to be some combined anti-China, pro-anywhere-else marketing involved as well.

panpanna 7y ago
But hasn't there been talk of moving from China to India/Vietnam for some years now? Did any of that actually happen or was it just talk until now?
- Rapzid 7y ago
  A lot of countries including Nintendo have moved and are moving to "Southeast Asia".. Okay so sue me for not reading the article first; Nintendo is mentioned. Giant is another. Not sure how widespread it is but it's real.
toasterlovin 7y ago
You’re joking, right? 25% increase in cost of goods sold is the only reason needed to move. I’m the CFO of a small company. We moved production out of China and into Taiwan and Vietnam. Despite labor being cheaper in Vietnam, our costs went up by 10%. We moved anyway because 10% < 25%.

baybal2 7y ago

Chinese manufacturing industry is already the most automated and robotised in the world. Chinese factories did not stand still for the last 10 years when accommodating the rising wages was their biggest trouble. This is very obvious to anybody working in the industry. The popular image of the industry being all about "sweatshops" is completely wrong.

the_resistence 7y ago
Not from my vantage point, I have many young contacts at companies in Shanghai. Lot of job cuts and putting 3 workers' efforts onto the head of the last remaining 1. Plenty of manual labor left...
- baybal2 7y ago
  Ever been to factories of Chines white goods manufacturers? Haier, Midea (technically same Haier), Gree, Noritz and many others? None were "lights out," but I can say that the labour does not contribute more than 10% of their cost for them.
seanmcdirmid 7y ago
That simply isn’t true. Unless you are using the superlative in a weak sense. For example, the reasons why Toyota’s are crap in China vs being quality everywhere else is because Chinese auto plants aren’t as automated as those in Japan and North America. China is definitely in the process of automating, but it is nowhere near where Japan is, or even the USA (not to mention Korea and Taiwan).