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Southeast Asia contains 11 countries, including developed countries, developing countries, and the world's ultra-poor countries. The development is extremely uneven, so many countries have introduced more favorable policies to attract foreign capital to invest in the country. The number of Cambodia and Vietnam is doing well. So is these two countries a paradise for investment in the eyes of capital?
The strikes in Cambodia are frequent, and the companies that migrated in the past have worked hard to maintain
Cambodia has benefited from the overall migration of the manufacturing industry. It can be said that the benefits are huge. 78% of its total exports are created by the manufacturing industry, and this 78% of exports actually account for 40% of Cambodia's total GDP. Imagine how much this country depends on manufacturing. However, Cambodian workers are very fond of strikes, and many bosses who open factories and factories in Cambodia can hardly tell.
The enterprises that set up factories in Cambodia mainly focus on clothing and footwear. The investment source countries are mainly mainland China, Taiwan, Hong Kong and South Korea. Clothing and footwear companies have long been a pillar industry in Cambodia. More than 800,000 people are engaged in related work. Many big brands such as Uniqlo, Adidas, Gap, H&M have established factories in Cambodia.
As mentioned earlier, these related industries have long been the mainstay of Cambodia's domestic economy. Cambodia has taken care of these factories in the ups and downs, not only to create jobs, but also to make the country taxable.
However, the reality is that strikes occur frequently, and each time it ends with a compromise by the business owner. This has caused more and more strikes in Cambodia. A little dissatisfaction will lead to the suspension of workers.
There have been two consecutive strikes of workers in July alone.
According to local news media in Cambodia, a 280 workers went on strike for five days in the capital of Phnom Penh on July 31 this year. Even though the Cambodian Ministry of Labor came forward to help negotiate, there were still 200 people who did not meet their conditions. And leaving.
On July 12 this year, a garment factory in the province of Ghana, Cambodia, saw a strike of thousands of people. They asked the employer for an 18-point job demand, and some of the demand was completely unreasonable.
Of course, the strikes are not just two in July this year. There have been hundreds of strikes since 2016, and the number of strikes has reached more than 100. The companies involved are from mainland China, Taiwan, Hong Kong, South Korea, Japan and other regions and countries can be said that no one has enjoyed it.
In fact, setting up a factory in Cambodia is not easy.
It is difficult to recruit first. The society in Cambodia is different from ours in China. There is no such big family and social pressure. There is no need to buy a house and buy a car. A large number of people are renting in a small room. Many people simply build a high-rise house in their hometown. A second-hand motorcycle is enough to cope with daily travel needs.
Secondly, Cambodia’s labor law is a bit too advanced for workers’ protection. For example, if a worker faints in a factory, the factory needs to bear medical expenses. If a large number of workers faint, the factory owner may be sued by the court; even during the strike, the factory still has to pay the workers' wages.
We certainly encourage any country to protect workers from the need to introduce relevant laws, but too unrealistic advance behavior does not help the economy.
The new "world factory" Vietnam's growth dilemma
According to relevant statistics, in the first quarter of this year, the “World Factory” attracted more than US$10.8 billion in foreign investment, an increase of 86.2% over the same period last year, and it is ahead in Southeast Asia. A large number of foreign companies have moved their factories to Vietnam.
However, the good times are not long. Many foreign-funded enterprises that have just moved in this year will find a cruel reality. The labor cost in Vietnam has been rising, and Vietnam has begun to experience labor shortages.
According to statistics, the wage level of workers in Vietnam in the first half of 2019 is 50% higher than that in 2014. The low wage standard in Ho Chi Minh City in Vietnam this year is equivalent to RMB 1237/month. The salary standard in Ho Chi Minh City is currently the highest in Vietnam. The average monthly wage of Vietnamese workers ranges from 2,200 yuan to 2,400 yuan. Most companies judge Vietnam's wage level to reach the current domestic wage standard after 7 years.
In addition to coping with the rising wages of workers, the factory in Vietnam has to face the embarrassing situation of not recruiting people. With the large number of factories moving into Vietnam, the difficulty of recruiting workers has become a problem in front of the responsibility of these factories. Many factories have to spend extra money to find suitable labor in remote rural areas.
In fact, due to the increasing number of factories, the previously cheap factory buildings are now hard to find. Many factory rents in Vietnam's industrial zone are not much different from domestic prices. In some areas, the rent of factory buildings is even higher than that of domestic ones. The factory rent is from US$3 to US$6 per square meter, and the average price is already very high.
The supply chain in Southeast Asian countries is a stumbling block to their growth as a “world factory”
No country on this planet can have a complete industrial system like China. Setting up a factory in China means that companies can easily find low-cost suppliers because China's supply chain is ultra-complete and ultra-cheap, but in recent years China's other costs are increasing, such as labor, factory rent, taxes. In other respects, many companies have transferred their factories to countries like Cambodia and Vietnam.
However, these factories that migrated to the past quickly found a problem. They could not find a suitable supplier nearby, whether it was raw materials or machinery and equipment, so they could only return to China for import. This part is bound to increase some costs.
The original intention of many companies is good. I plan to open factories in these countries in Southeast Asia, which can reduce costs and obtain more commodity profits. But after a round of turnover, they will find how ridiculous this idea is. .
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