Asia Minute: Considering Factory Moves from China to the Philippines
Companies here in Hawai‘i and around the world are always looking for a competitive edge. Part of a successful strategy is picking the right location for operations. And for dozens of Japanese companies, that means considering a change. HPR’s Bill Dorman explains in today’s Asia Minute.
As many as 200 Japanese companies would like to shift some operations from China to the Philippines. That word came late last week, when Philippine President Benigno Aquino wrapped up a four-day visit to Japan…designed in part to draw interest from Japanese investors.
Rappler.com, an online news service based in Manila quotes a top official of the Japanese Chamber of Commerce and Industry of the Philippines as saying they’re received inquiries from about 200 Japanese manufacturers interested in relocating some or all of their presence from China to the Philippines.
China’s economy has been slowing, but workers’ pay has been going the other way. According to the Nikkei Asian Review, wage costs in China have nearly doubled over the past five years. Earlier this year, the watch maker Citizen closed a factory in Guangzhou, cutting nearly a thousand jobs. Some companies moving to the Philippines cite advantages from tax breaks to an English speaking work force.
But there are still challenges in the Philippines, from poor infrastructure to corruption. Transparency International ranks China as 100 of 175 countries when it comes to its corruption perceptions index. The Philippines fares only slightly better, coming in at number 85.