Has China achieved labor costs exceeding "Japan" and catching up with "America"? Yes! According to a recent research report released by the Oxford Institute of Economics, China's labor costs are indeed higher than those of Japan and are catching up with the United States.
The report from the Oxford Institute of Economics sets the labor costs of the United States in 2003, 2012, and 2016 as benchmark values. It can be found that in 2003, China's labor costs were only about 40% of those of the United States, but by 2012 they were already close to those of the United States. The report predicts that labor costs in 2016 will only be 4% cheaper than in the United States!
Meanwhile, the report also shows that compared to China, labor costs in developing countries such as Mexico and India are much lower, with India's labor costs only accounting for 30% of China's, and Japan, as a developed country, only accounting for about 70% of China's labor costs. So it has to be said that China has indeed achieved a super Japanese catch up with the US in terms of labor costs.
The rising labor costs in China are not fabricated by foreign research institutions, but can also be proven by research reports from authoritative domestic institutions. On July 3, 2016, the China Information Technology Hundred People Association and Deloitte Certified Public Accountants jointly released a report stating that although China is currently the most competitive manufacturing country in the world, its labor costs have increased fivefold in the past 10 years. The increasingly expensive labor costs, coupled with an aging population and declining economic growth, may lead to China's manufacturing industry being replaced by the United States as the world's number one by 2020!
The issue of rising labor costs is present in all industries in China, and the magnetic component industry is no exception. For companies in the magnetic component industry, rising labor costs cannot be a blessing. Enterprises will earn less profits due to increased wage expenditures, and the funds used to expand their development scale will be further compressed, posing a severe challenge to their development! In this situation, magnetic enterprises should accelerate the improvement of automation production level, use more automation equipment to replace human labor, and strive for maximum profits by minimizing wage expenses.
At present, many enterprises in the industry consciously replace manual production with automated production when carrying out production activities. However, due to factors such as outdated magnetic component production processes and low quality automation equipment, costs cannot be reduced, and even production costs may be higher than when using manual labor!
However, outdated technology can be optimized, and equipment that is not easy to use can also be improved by innovating the magnetic materials in it! Enterprises should pay as much attention to relevant information as possible to improve automated production processes and optimize and upgrade equipment.
