Outlook on Light Manufacturing in China: September 2015

September 7, 2015 Posted by China Briefing Reading Time: 4 minutes

The below is a sample of Cascade Asia Advisor’s monthly report on light manufacturing across emerging Asia, available for purchase through the Asia Briefing bookstore. The report is a 4-5 page executive-ready assessment and outlook designed to help companies anticipate labor risks and dynamics across key manufacturing countries in Asia. Countries of coverage include Cambodia, China, Indonesia and Vietnam.

With China’s recent move to devalue its currency, export-oriented manufacturers were granted a temporary cost advantage and are likely to see growth in order quantities from low-end retailers or receive requests for contract renegotiations. While adapting production plans and piece rates, factories are likely to see requests for quantity and price adjustments in their orders and will be looking to take preventive measures to minimize the risk of rising labor disputes over working hours, shift arrangements and wage calculations. Such measures may include consulting workers on shift planning and ensuring clearly communicated working hour arrangements between management and workers.

A three-day nationwide special holiday from September 3 – 5 has been set to mark the 70th anniversary of the end of World War II. Employees working during this period are to receive double time pay. Brands should note that this presents the potential for labor disputes over unpaid or delayed holiday pay and that wage inspections will begin immediately after the holiday.

The requirement for factories to disburse a monthly High Temperature Subsidy will continue through September for workers operating in excessively hot conditions specified in national and provincial regulations. Amounts differ in each province but range from 150 Yuan to 200 yuan per month.

Guangdong: According to the recently published ‘Method for Labor Dispute Resolution of Guangdong Province (Draft for Submission)’, employees filing for wage arrears and work injury compensations will no longer need to reach ‘economic difficulty’ before seeking legal aid from government agencies. With workers to be given easier access to legal proceedings, factories should be prepared to tackle employment issues that may lead to possible lawsuits.

Zhejiang: Nothing to report

Fujian: Nothing to report

About Us

Cascade Asia Advisors is a boutique advisory firm focused on Southeast Asia. They help businesses anticipate risk and make better decisions using forward-looking, localized intelligence. For information about developments mentioned in this report, please contact them at info@cascadeasia.com.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

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