Passage 2
If you still think Asia is cheap or even a bargain, compare office rents in Shanghai or Jakarta with those in Chicago and Paris. No wonder companies are voting with their feet in response to Asia’s rising costs. Matsushita, Sony and Honda continue to move production out of Japan. Taiwan’s Nan Ya Plastic is establishing factories in North Carolina and Texas to export back to Asia. Germany’s Siemens is dumping Singapore in favor of lower cost locations in the region. The way things are going, Siemens may have to move again before too long.
Take Korea, which has lost footwear and textiles to China and Indonesia because Korean wages kept climbing but productivity did not. Losing footwear may be nothing to cry over if that industry can be replaced, but what will substitute for low-tech electronics in South Korea and airline customer service activities in Hong Kong? The competition is not going to let up. To attract investment from East Asia and elsewhere, local authorities in Britain and state governments in the United States offer to cut taxes, provide cheap land and reduce bureaucracy. Technological innovations and cost reductions in telecommunications and transport mean that location is no longer as important as it was.
Too many Asian governments don’t seem to understand that as costs rise, competitiveness falls and investors shy away.
21. When the author argued that costs in Asia are too high, he was only making comparison between doing business in Asia in the past and today.
22. Companies are fighting against the increasing cost in Asia by demanding with majority votes that the cost be lowered.
23. Siemens would leave Singapore but find a better place in Asia and settle down there.
24. Asian manufacturers now would have to face competitions not only from their neighboring countries but those of the industrial nations.
25. According to the author, competitiveness would fall with the rise of costs.
