Cost Push Would Not Threaten China’s Status as Toys Manufacturing Kingdom
American toys Chinese companies still choose China as the preferred sites of toys Chinese factories. In addition, some American toys brands have expressed that Chinese workers’ handicraft and infrastructure could completely set off the growing costs. However, the cost push in China has forced some western fashion brands to seek new places with lower cost to build new Chinese factories.
The CEOs at Hasbro, LeapFrog Enterprises and Toys R Us expressed on a sailing meeting that China would still be the manufacturing center of toys with many advantages such as low labor cost, infrastructure construction and preferential policies.
Brian Goldner, CEO of Hasbro, said that Chinese cost advantage could maintain for many years.
However, some consulting Chinese companies and toys brands have expressed the different ideas on Chinese toys manufacturing industry. The Boston Consulting Group in May predicted that in 2005, Chinese manufacturing labor cost would exceed America with an average 15 percent to 20 percent salary growth each year.
On the other side, Goldner also expressed that labor cost only took up 7 percent to 9 percent in all the manufacturing cost and Hasbro has been employing the automation manufacturing equipments. In addition, Hasbro doesn’t directly build Chinese factories in China.
China, especially Hong Kong, is the communication center of toys Chinese suppliers, manufacturers and carriers. Therefore, it is difficult for some other Asian countries such as Vietnam, India and Sri Lanka to challenge the status of China as the world’s toys manufacturing base.
Jerry Storch, CEO of Toys R Us, said that people would recall Hong Kong when it came up to toys just like Silicon Valley to IT industry.
Of course, some simple manufacturing procedures such as plastic bucket, toys furniture and stuffed animal toys have been transferred to some other Asian countries such as Vietnam. However, China is still attractive for the toys Chinese companies with game products and toys becoming complex and employing more electronic technologies.
John Harbour, CEO of LeapFrog Enterprises, expressed that Chinese manufacturing infrastructure was incomparable and China was still attractive for the foreign toys Chinese companies as the world factory.
Although it is a tendency that foreign toys Chinese companies are seeking producing basements with lower labor cost, China would be still the world toys production centre for a long time.