Improve business environment

(China Daily)
Updated: 2010-07-06 08:10
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While companies like Foxconn, in the news for employees' suicide, have started the process of shifting their production bases inland to maintain their low-cost operation, the provinces where they relocate should help improve the business environment, says an article in Shanghai Business Daily. Excerpts:

A strike called by Foxconn workers after some of their colleagues committed suicide in protest against low wages and poor working conditions forced the company to raise wages in its plants.

Some other companies have followed Foxconn's example after their employees threatened to take or took industrial action.

Related readings:
Improve business environment Foxconn relocates production to save cost
Improve business environment Foxconn to build plant in C China's Zhengzhou
Improve business environment Foxconn plans plant with 300,000 workers in C China's Henan province

The rising labor cost, along with the possibility of a further revaluation of the yuan, has prompted many processing factories to move to inland provinces like Jiangxi and Sichuan, where the labor cost is lower.

But inland provinces have two drawbacks: less advanced transport network and lack of proper market environment.

So many enterprises may prefer the relatively small increase in the cost of production at their original locations to the transport and market problems that they would face in other provinces.

Only if the central and western provinces take serious and urgent measures to improve their market environment, can it be a win-win situation with labor-intensive industries relocating there.