No country likely to replace China as 'world's factory': Li & Fung

By Kim Young-gyo
HONG KONG (Yonhap) - The head of Li & Fung Ltd., a global trading firm, said Tuesday that China will continue being the world's manufacturing powerhouse as no country can replicate the scale of the country's production base.
"Today Li & Fung does 50 percent of our exports from China, and 50 percents of our exports from the rest of world. The rest of the world is about 40 to 50 countries, and the rest of the world equals to one China," Bruce Rockowitz, president of the world's leading trading and supply chain-managing firm, said in a speech to the Foreign Correspondents Club in Hong Kong,
"So when you (spin) the globe to see what will become the next China, you know there is no real next. We are not going to find another China."
As labor costs will continue to go up in China, especially at its southern part of China, where industries and factories are densely built, the country will likely see its consumer goods production move away to the western part of the country, the president expected.
"China was created on migrant workers that moved away from their family, and that's how the whole south was created," he said.
Chinese factory workers have become increasingly aware of their labor rights and have demanded factory owners to give them higher wages.
Many migrant workers often refuse to return to the factories in the southern region after taking long holidays.
In order to resolve such labor issues, firms in China will likely shift their production base to the regions where potential workers actually live, without forcing them to move away from their families.
The Li & Fund president expected the company will continue to source about 50 percent its goods from China, indicating the country will remain to be strategically important for Li & Fung.
"It (China) is definitely not going away," he said.
"There is no viable alternative to the scale of China."