EconoChina

A blog on Chinese economy & society

Posts Tagged ‘Taiwan

Foxconn to relocate to inland China

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Hong Kong media has reported that Foxconn is to close most of its Shenzhen (that’s the suicides factory located along the eastern coast) operations and relocate to factories more inland, like the one up north in Tianjin and to the southwest in Chongqing. There are also reports that it’s reviewing opportunities in India. So perhaps some operations will eventually move out of China all together.

Company spokesperson maintains that the relocation has been in planning for a long time, and is in accordance with Guangdong government’s plan to upgrade coastal industries. However, while the upgrade proposal has been out for two years, it’s only recently that Foxconn is seriously considering relocation. So this is clearly driven by increased costs along the coast. Wages at inland factories located in Tianjin and Wuhan, for example, are only half of that at Shenzhen.

This type of relocation will most likely be welcomed by the government (the central government anywayz. Not sure about that of Shenzhen) which is busy rebalancing the economy, both geographically and structurally. It also helps put a lid on coastal workers’ wage demand to less than explosive and hence more adaptable for the exporters.

Besides wage concern, China’s pending new trade agreement with Taiwan, which will eliminate most tariffs, prompt some Taiwanese companies ling Ting-Yi to consider relocating back to Taiwan to cut down on transportation costs to Southern China.

So all in, major shifts in economic make up is at hand right now.

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Written by Cindy Luk

June 13, 2010 at 4:18 pm

Posted in China, Macro

Tagged with , , , ,

Taiwan announced end of QE

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The central banker of Taiwan announced in the evening of official end to quantitative easing, aka money printing. The central bank plans to issue long-dated repo tomorrow to mop up excess liquidity. Interest rate is held constant for the time being.

Yes, the liquidity tide has turned, at least in Asia.

Written by Cindy Luk

March 25, 2010 at 2:40 pm