Relocating labour-intensive manufacturing firms from China to Southeast Asia: a preliminary investigation

Abstract

China’s rise as a “world factory” since the late 1970s has been attributed to the strategic coupling of local assets in the coastal regions, viz. Pearl River Delta (PRD) and Yangtze River Delta (YRD) in the global production networks (GPNs) driven by transnational corporations (TNCs). Since 2000, these export-led regions have encountered unprecedented challenges, particularly the rising cost of labour, which have engendered spatial relocation of labour-intensive manufacturing firms from coastal China to lowercost locations such as inland China and neighbouring Southeast Asian countries. A rich body of literature has examined the internal relocation of TNCs from coastal to inland China, relatively little has been conducted on cross-border industrial relocation out of China to Southeast Asian countries. Drawing upon the global production networks (GPNs) perspective, this study attempts to examine the relocation of TNCs from China’s coastal regions, e.g. the Pearl River Delta (PRD) to Southeast Asian countries, e.g. Indonesia, Vietnam and Cambodia. Particular attention is paid to the rise of Global South and its subsequent implications for the restructuring of global manufacturing in the increasingly globalizing economy.