By Steve Toloken, Plastics News Staff
Taipei, Taiwan -- The US isn't the only place debating "reshoring" of manufacturing from China these days -- Taiwan's large plastics industry is also taking a hard look at whether rising costs in mainland China will bring some manufacturing back.
As with the debate in the United States, anecdotes can sometimes seem in greater supply than hard facts. But executives at the recent Taipei Plas show said there are strong signs that manufacturers there are rethinking the China cost equation.
Over the last two decades, Taiwanese companies have sent a lot of their manufacturing to China to take advantage of lower labour costs. But with factory wages rising 15 percent a year on the mainland, some are taking a new look at the business case for "reshoring."
Two years ago, when Taiwan's government started urging businesses to consider it, some executives didn't take the suggestions seriously, said David Chang, vice general manager of Taiwanese press maker Multiplas Enginery Co. Ltd.
"At the time people considered it a joke," Chang said. "Now people don't think it's a joke because of the wage increases [in China]."
The head of the Taiwan Plastics Industry Association, which represents about 700 processing and mould-making companies on the island, predicted some work could come back, although he cautioned discussions are in their early stages.
Hsieh Sheng-Hai, secretary general of the Taipei-based group, said processors are closely studying it and want to see how key customers, including Taiwan's large contract electronics manufacturers like Foxconn, handle the increased challenges of operating on the mainland.
He noted that even if work leaves the mainland, it may not come back to Taiwan - it could go to Indonesia, Vietnam or elsewhere in Southeast Asia. But it's also true that Taiwanese companies see more problems operating in the mainland and are looking for solutions, industry officials said.
"They feel moving back to Taiwan would be much easier to do their business," Hsieh said.
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