One of the reasons that China's GDP has been growing at a yearly average of ten percent for the past two decades is the large amount of Foreign Direct Investment coming from Hong Kong, Taiwan and the West. However, China's GDP growth rate dropped to 8.7 percent during 2012 with a slow down in export growth from 26% to 7%. A lot of economists started to doubt that this might be the end of the phenomenon of the Chinese export miracle. With other developing countries emerging in East Asia, many investors have begun to consider moving their factories and investments out of China and into countries where the costs of labor and supplies are cheaper. This paper will attempt to predict whether investors will move out of China and into other developing countries as `well as predicting the result from the following aspects: infrastructure of the country, business environment, and currency values; but the main focus will be on labor issues. .
What are some of the rising developing countries in East Asia that investors are looking at to move their factories and investment into? To answer this, I have selected three countries in East Asia who are close to China in geographical terms and also very similar to China before the Foreign Direct Investment swarmed into China in the 1990s; India, the Philippines, and Vietnam. The worldwide exports ranking for each country is as follows; India is 18th, the Philippines are 59th, and Vietnam is 35th (CIA). Their total current export value is still far behind from China's, but they have some advantages that China is beginning to lose; namely cheaper labor and a cheaper currency. As of right now, we have not seen groups of investors pull their investments out of China. So what are some of the advantages that China has over those aforementioned rising and developing countries?.
To begin, China's infrastructure provides investors with good transportation abilities and a stable power supply to develop business with high productivity and efficiency.
