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Pegatron Handles Increasing Wage Costs in China By Value-Added Products

By Korbin Lan
Published: Jan 26,2015

TAIPEI, Taiwan - China labor wages continued to rise, Taiwanese ODM company Pegatron will increase value-added products to cope with the increased costs, in no hurry to transfer to other countries in Southeast Asia.

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China's labor wages is getting higher, and the government also canceled the relevant preferential subsidies of manufacturer, that brought enormous pressure to Taiwanese manufacturers in China and intends to reduce investment in the mainland China, turn towards to Southeast Asia.

But Pegatron believes that enterprise should be the perspective of value-added products, not on looking for other cheaper wage areas.

Tung, Tzu-Hsien, Pegatron chairman, said that China is still the largest global provider of workforce, Vietnam, Burma and other Southeast Asia countries can not provide such a huge population of labor. And many work has been able to be replaced by automated equipment, enterprises do not necessarily to turn to Southeast Asia.

He took Pegatron Shanghai factory for example, said that the cost of production in Shanghai is more expensive than Central China and other places, but has higher added-value in local to cope the cost. And brands will consider the transportation effect of goods, if the production of products shipped from the west, it is difficult to meet market demands in sales season.

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