Cloud of hurting companies has a silver lining

Last week, Tianneng Group of Zhejiang province in East China, which makes lead-acid batteries for electric vehicles, said it will set up a new plant in Southeast Asia, closer to its clients, amid surging production costs in China.

Tianneng's decision wouldn't surprise China's auto industry and ancillary players, many of whom are based south of the Yangtze River. Hurt by rising costs like wages, they are eager to either set up new plants in ASEAN countries, mainly Vietnam, or relocate altogether, by coasting on the ASEAN-China Free Trade Agreement.

According to one expert, the trend should not alarm China. It is, nevertheless, strong enough to warrant PowerPoint-backed talks over executive breakfasts at five-star hotels in Beijing.