After rush to China, manufacturers look back to Southeast Asia – Wayne Arnold

From The New York Times, via the International Herald Tribune (link):

From automobiles to semiconductors, China is fast catching up with the rest of the world in manufacturing prowess, making it a formidable competitor for exporters everywhere. But does its rise necessarily spell doom for Southeast Asia’s big manufacturing centers?

Not according to Teh Hok Peng, a manager at the factory in Penang, Malaysia, of BenQ, a Taiwan electronics maker.

Four years ago, as high-tech factory jobs in Malaysia were shifting to China and obituaries were being written for Southeast Asia’s electronics industry, Teh went with the trend: He packed up his wife and two small children and moved to Suzhou, China, to manage BenQ’s factory there as it began shifting production out of Penang.

Since then, however, Southeast Asia’s big economies have proved the doomsayers wrong. Instead of shutting their factories and relying on raw material exports, as many pessimists predicted, the more prosperous countries – Malaysia, Singapore, Indonesia, Thailand and the Philippines – have generated a trade surplus of about $20 billion with China in 2004, supplying it with sophisticated electronic components. For the first eight months of 2005, the surplus was $13.6 billion.

In contrast, the United States trade deficit with China was $201.6 billion in 2005, while the European Union’s was $70 billion.

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