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Aug 29, 2007

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Rob

There is no reason for companies to flee China for other countries, since there are, in essence, many layers of China. My company in China has a plant in a costal city and another 3 hours inland. The wages 3 hours inland were 1/3 of the wages in the costal city when I was working there. If you didn't keep up with wages, the workers you spent a year training were next month working for the new factory across the street.

The people I know who are starting factories in China, and helping others start factories, have been moving inland for the last 5 years. As wages rise, it's inland to the next city for the next factory. The best start greenfield factories.

I figure you've got another 8 layers or so of China before you have to start looking to other countries.

Michael W. Kruse

Interesting, Rob. I posted a link to an article back in Jan. from The Economist The problem with Made in China. That article also suggests going inland as a solution. It seems the trade off is higher transportation costs for goods in order to access the cheaper labor. Other nations have more accessible cheap labor but with poorer infrastructure at costal cities. Sound like everyone is spurring everyone else on to growth.

What industry are you in?

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