Rising Factories Costs Erode China’s Edge

Increasing energy and material prices, wages, and environmental regulations are all making it harder for factories in China. AP in Shanghai reports that many factories are now moving overseas to keep costs down.

Costs in China are climbing nationwide, but the greatest pain is being felt in the south, where about 14,000 Hong Kong-run factories could close in the next few months, said Polly Ko of the Economic and Trade Office in Guangdong, which neighbors Hong Kong.

To adapt, many multinational manufacturers – including Intel Corp., iPod-maker Hon Hai Technology Group and Japanese companies like Canon Inc. and Sony Corp. are expanding operations in Vietnam.

Auto parts makers are decamping for the Middle East and Eastern Europe, textile-makers to Bangladesh and India.