Sunday, January 22, 2012

Why production still moving to Asia

Would you locate production in a country that had out of control legal system that could hit you anytime, onerous labour laws, unions, a mountain of ever changing environmental and other regulations... fat, lazy populous who is anti-business, a government which is radically anti-business.

Or in a country powering forward and who wants real industry, like your business. Who couldn't care less about things like the percentage of women in your management. All they care about is you creating real wealth in their nation.

I think even when Chinese wages surpass European levels, production will still stay there. Just like it is staying in South Korea and Japan. Actually still production is moving to South Korea and Japan in many areas like shipbuilding and aviation.

The same question was asked recently with regards to automobile production. Why was GM moving production to Korea, when Korean industrial wages are higher than American industrial wages? Well for GM it is simple, they look at the output they get per $ spent, and they simply get more

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