South China regions told investing in ASEAN territories cheaper than at home

A Chinese researcher suggests Chinese companies in southern China look at investing in other Asian countries where he says start-up costs and wages are much lower than on the mainland.

Addressing a recent forum for businesses in the Pan Pearl River Delta, You Aiqiong, a researcher with the Guangdong Provincial Academy of Social Sciences, says that with a shortage of migrant workers in Guangdong, labor-intensive businesses should take the advantage of a new investment agreement being negotiated between China and ASEAN.

You cited a research by Hong Kong Exporters' Chamber of Commerce which showed that launching a garment factory with 1,000 workers in Viet Nam would require an investment between 6 million and 7 million Hong Kong dollars. The same factory would cost several times that amount if it were on China's mainland.

The Pan Pearl River delta region encompasses Hong Kong, Macao and nine mainland provinces and autonomous regions accounting for one fifth of the country's territory, and one third of China's population.

This year China is expected to conclude negotiations on a China-ASEAN Free Trade Area. It will also provide developing countries with 10 billion U.S. dollars worth of preferential loans, one third of which will go to ASEAN nations, said You.

Moreover, the Chinese Government will add an extra five billion U.S. dollars worth of preferential loans to support Chinese companies investing in member nations of the ASEAN.

Source: Xinhua