Even assuming some kind of orderly transition to new regions, how do these manufacturers deal with 20% wage (everywhere) and 50% plus input costs increases against a 3% Yuan uptick? This won't be cured just by a 5% price increases on exports.
What happens to these emptied out old regions, just write it them off as if locusts came through? What about lending used there? All amortized and used up, I doubt it. This are businesses being shut down NOW, not as some grand plan. I believe we are witnessing chickens with their heads cut off.
Stories like this one are popping up all over. Despite some relocation back the the US, the US is not prepared to fill this shortfall in a serious way, and even if they can over time it will be at much higher cost and inflationary.
english.sina.com
The Container Store, a Texas-based retailer that sells storage products such as containers and bookshelves, has been waiting for a shipment for four weeks. One of its suppliers shifted all production back to the US because of the labor shortage in China, according to CNN.
Huang He, vice president of the Jinghua Group, told the Global Times that his factories normally employ 1,500 people, but some 500 of them resigned last month to take a long break .
Many workers rushed home earlier out of fear they would not be able to find a train ticket home due to the overwhelming demand.
Employers are trying new ways to keep their businesses running. In order to encourage workers to return after the holiday, some companies bought tickets for migrant workers.
Huang said all workers who take just the minimum seven-day holiday would receive an extra 500 yuan ($75), enabling such workers to earn 2,500 yuan ($379). However, only 200 people accepted his offer.
"We cannot afford higher wages since the price of raw materials makes it hard for us to get a profit," Huang told the Global Times. |
