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Electronics Production | August 18, 2008

Made-in-China becomes expensive

Policy changes and rising costs in China force many low-end manufacturers out of business. Or they simply leave China for somewhere else.
Escalating costs as well as a slowdown in European and the US markets has impacted on the Chinese production landscape. Additional to that, the Chinese yuan is becoming stronger and the Chinese government has finally implemented various policy changes - all resulting in the closure of many low-end and export-driven factories in southern China.

Many others consider relocation as an option - to inland provinces in China, India, Vietnam, Bangladesh and even Mexico. Regional trade associations estimate that over 100,000 low-end factories in China will have been closed down by the end of 2008, reports DNA.

But even bigger players are affected by the change; India based Videocon is scaling down the production at its Guangdong facilities and Taiwan based Foxconn is opting for new factories farther afield in India and Hungary.

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