FOREIGN INVESTMENT pouring into China is going through a seismic shift from low-end manufacturing towards services. This is shaking up the global supply-chain status quo, and thrusting fast-growing but still relatively low-cost Southeast Asia into the spotlight as an attractive alternative location for labour-intensive manufacturing.
As China's economy has developed and grown, wages and production costs have risen sharply. Manufacturing goods in China is no longer as cheap as it once was. Markets such as Vietnam and Cambodia are becoming appealing alternatives for foreign companies that are mulling investments in labour-intensive manufacturing projects.
The shift in flows of foreign direct investment (FDI) is actually good news for China. Attracting investment in value-added sectors such as services and high-tech manufacturing is preferable to flows into low-value manufacturing. It is in line with government efforts to maintain strong economic growth and draw greater attention from overseas investors.
The shift in flows of foreign direct investment (FDI) is actually good news for China. Attracting investment in value-added sectors such as services and high-tech manufacturing is preferable to flows into low-value manufacturing. It is in line with government efforts to maintain strong economic growth and draw greater attention from overseas investors.
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