Mainland Production Costs Are Rising But Competitiveness Is Still Stronger Than The Periphery.

The research report released by Hongkong Trade Development Council on 3 shows that the rising cost of production in mainland China is not damaging its competitiveness, and the proportion of mainland products in Global trade continues to rise.

On the same day, the Hongkong TDC issued the two study report entitled "rising pressure on the rise in domestic export prices" and "competitive advantage of supply chain: emerging areas in China and Asia". The reasons for the increase in mainland production costs and their impact on Hong Kong businessmen in recent years were analyzed respectively, and the competitiveness of the mainland and other parts of Asia was compared.

According to the survey, more than half of the companies surveyed said they encountered the shortage of labour in the Pearl River Delta region in the first half of this year.

In order to retain talents, the Pearl River Delta wages have risen by an average of 17% over the past 6 months, plus the corresponding increase in the social insurance premiums paid by employers, raising the total production cost by 4% to 6%.

The survey also showed that the local content (i.e. the production cost of RMB settlement) has increased from an average of 30% years ago to 49.8% at present.

Therefore, the appreciation of the renminbi is a major challenge for mainland Hong Kong businessmen.

Qiu Liping, deputy chief economist of the Hongkong Trade Development Council, said that despite the challenges of rising production costs and appreciation of the renminbi, the proportion of mainland products in Global trade continued to increase from 4.7% in 2000 to 12.7% in 2008, indicating that the competitiveness of the mainland as a production base is not limited to price.

The quality, delivery time and flexibility of the mainland products to meet the needs of different orders are better than those in other Asian countries.