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China no cheap labor haven: Chiang

China is no longer the cheap labor manufacturing base it used to be, Chinese Nationalist Party (KMT) Vice Chairman Chiang Pin-kung (江丙坤) said yesterday.

Speaking at the 2007 Forum on Cross-Strait Industrial Cooperation and Development held in Kunshan, Jiangsu Province, Chiang said most Taiwanese investors in China's coastal areas were facing labor shortages.

Chiang said that as the Chinese government had shifted its economic development focus to the central, western and northeastern areas of the country, it had become more selective in approving investments from Taiwan.

As a result, Taiwanese who plan to set up labor-intensive businesses in China's coastal areas face a higher investment threshold and have little room to maneuver, he said.

Chiang said that Taiwanese investors also face rising production costs and difficulties acquiring materials for their factories.

Aside from the labor shortage, businesses have to contend with rising wages, with the average monthly wage for a worker in a Taiwanese-invested factory now surpassing US$200, he said.

Taiwanese investors looking to survive in business have two alternatives: move their production bases to China's inland areas or to the north, or transform their businesses into technology intensive or service industries, Chiang said.
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