[ 05-06-2015 ]
ASEAN Set To Become Asia's Next Low-Cost Manufacturing Powerhouse
KUALA LUMPUR, June 2 (Bernama) -- ASEAN is poised to become Asia's next low-cost manufacturing powerhouse as wages in China's Pearl River Delta (PRD) factory belt continue to creep up, said an economist.
Standard Chartered Senior Economist Kelvin Lau said as China sees waning wage competitiveness, ASEAN stood to gain with its lower costs and abundant supply of labour over the next 20 years.
He said Vietnam, with its geographical proximity to China, was poised to be one of the biggest beneficiaries as low-cost manufacturing shifts away from the PRD.
"The companies in our survey estimated that moving here could give them an average cost reduction of 19 per cent. Cambodia, on the other hand, could yield a 20 per cent saving on wages," Lau said in a statement.
As a whole, ASEAN has a strong and varied manufacturing capabilities -- from low-cost factories in Cambodia, Laos, Myanmar, Vietnam and Indonesia, to mixed manufacturing and electronics in Thailand, Malaysia and the Philippines, and high value-added production in Singapore.
To make the most of these diverse strengths, however, ASEAN needed to achieve better integration, he said.
"In addition to improve infrastructure links, a common regional framework for investment regulation would make it much easier for companies to adopt a pan-ASEAN strategy with operations located across the region," Lau added.