Fears of hollowing out of Singapore's manufacturing base unf
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Singapore's manufacturing sector could be seeing the tail-end of a massive relocation drive to low-cost countries.
Investment bank Credit Suisse First Boston says it is hearing of firms returning from China to set up services and high-value added IT production in Singapore.
It says the strong showing in the manufacturing and services sector last year put paid to talk of a "hollowing" out of Singapore's manufacturing base.
Many companies have been setting up production bases in China to take advantage of the lower labour costs there.
But in its latest research report, CSFB says there are signs that companies do not want to put all their eggs in a single China basket.
In addition, problems with intellectual property rights and high logistics costs in China are starting to push capital flows back home.
Logistics costs in China account for 3 percent of sales but in Singapore, they are much lower at about 1 percent.
And due to the shortage of talent in China, it is also more cost-effective to do high-value added services in Singapore - such as testing, process management, and design services for R&D.
CSFB says the Singapore economy is emerging from massive structural adjustment.
It is forecasting growth of 5 to 6 percent over the next one to three years. - CNA -
Actually, some ppl has been talking abt this already...
China is not 100% better than SG -
but its more than 100% cheaper to manufacture goods thereOriginally posted by sbst275:Actually, some ppl has been talking abt this already...
China is not 100% better than SG
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But logistics and law and order makes it....Originally posted by InnoHippo:but its more than 100% cheaper to manufacture goods there