As reported by Economic Observe in Beijing China is witnessing an increasing number of manufacturing companies located in Shenzhen and Pearl River Delta move their facilities in inland. This is planned move taken by the companies to reduce costs and get the support of the local market to sustain their position in the time of evolving market.
Initially the trend started with a few companies, later leading market players such as Airmate, the Taiwanese electronic marker moved its plant with the support of the provincial government of Jiangxi to the Jiujiang Economic Development Zone of the province in May 2014. The Jiujiang Economic Development Zone is sprawling location spread over 400,000 square meters.
According to reports, Airmate was planning since the last 10 years to move its production unit inland to the zone marking economic development. In the span of ten years the company considered aspects such as local policies and transport conditions before finally deciding to move its factory to the economic development zone.
Tsai Cheng-fu, Airmate Electrical (Shenzhen) Co. Vice President said that the relocation happened three years earlier than it was planned. Insufficient resources of land was the primary factor influencing the company to move out of Shenzhen, the province which already boasts a primary population of over 10 million people who lives across an area of less than 2000 square kilometers. Tsai, also said that the cost of warehousing in Shenzhen is significantly high compared to Jiujiang, hence it was an obvious decision on part of the Airmate Electrical (Shenzhen) Co. to relocate its factory.
Another crucial reason cited behind the relocation is that labor cost in Jiujiang is way lower. The company had to incur a minimum monthly wage of 2,030 yuan (equivalent to $327) on an individual labor. However, in Jiujiang it will have to pay 1,300 yuam per labor. Moreover, it had also become more difficult to find suitable employee in Shenzhen, which is why the company finally decided to relocate to Jiujiang.