Large Manufacturers Benefit from China's Increasing Labor Costs PDF Print E-mail
Friday, 25 January 2008 09:17
BEIJING – China's recent labor laws might actually prove a boon to larger companies such as Foxconn and Yue Yuen Industrial Holdings, analysts say.
 
Labor laws enacted this month could drive employers' costs 5 to 40% higher, according to industry estimates, because conditions have been set with regard to severance pay, medical, retirement and housing benefits.
 
However, the laws could be beneficial in the long run for large manufacturers because smaller competitors could be pushed out, an analyst for ABN Amro says.
 
The laws’ bearing on Hon Hai and Yue Yuen, which employ hundreds of thousands of Chinese workers, could prove to be less crucial than for smaller firms because they already pay above-regulation wages to maintain a large workforce.
 
However, dozens of factories in Southern China will close or move operations to lower-cost regions such as Vietnam, according to local media reports and labor organizations.
 
The Taiwan Merchant Association in Dongguan estimates the labor laws have raised business costs for Taiwan firms between 20% and 40%.
 
Also, workers fear reduction in overtime hours, and those returning to their jobs after the holidays could be fewer. Reportedly, many workers log about 80 hours a month in overtime, and overtime rules that were made before the new labor laws generally have been ignored. However, many employers are now more fearful about disregarding regulations curbing overtime hours. The result remains to be seen.
Last Updated on Monday, 04 February 2008 11:09
 

Columns

Eastern-US: China’s New Competitor?

Parity emerges among EMS Factories from Asia, Mexico and the US.

For the first time in years we see parity in the Eastern US among EMS factories from Asia, Mexico and the US. This EMS market condition will permit American OEMs (the EMS industry refers to OEMs as customers) to have more EMS pathways to choose from. Now more than ever, such EMS assignments will require deeper investigation relating to the OEMs’ evaluation of manufacturing strategies.

Read more...
 
The Human Touch

For those who count on the electronics industry for big feats, it’s been a remarkable couple of years.

Read more...
 

Features

Advances in Concentration Monitoring and Closed-Loop Control

Contaminated bath water skews refractive index results. New technology can accurately measure aqueous cleaning agent concentration.

Read more...
 
Circuits Disassembly: Materials Characterization and Failure Analysis

A systematic approach to nonconventional methods of encapsulant removal.

Read more...
 

Search

Search

Login

CB Login

Language

Language

English French German Italian Portuguese Russian Spanish
 

Products

KIC Debuts K2 Thermal Profiler
K2 thermal profiler has plug-and-play hardware and a graphical user interface said to make profiling both quick and easy. Enables each thermocouple to use its own unique process window, while...