Where is the next Shenzhen


I would like to talk more about Shenzhen. So I searched “Shenzhen” in the blogsphere. However, most of the blogs popped out have no significant connection with the factory working conditions there. I am glad most foreigners still enjoyed this city, even if it has some unpleasant reputation around the world. Then I searched Foxconn, which is known as the largest electronic contract manufacturer. Surprisingly, instead of blogs about the terrible working conditions, which I was expecting, most reports about Foxconn now is about how it is going to outsource its own business.

There are two relatively opposite directions Foxconn is going. First is Foxconn is expending its business to less developed countries, such as Indonesia and Vietnam. I believe that is what most people are expecting. Just like what I talked about in my previous blog, China was the next Japan. After Japan successfully transfer from an export country to  an import country around 1970s’, China became the next Japan and foreign companies outsourced billions of business to China’s contract manufacturers. Now, China is doing the same to other countries. As China is focusing on the economic transferring, more and more factories are forced to shut down due to poor working conditions or uncontrolled environment pollution. Major manufacturers, like Foxconn, with their advanced managing model are trying to outsource their work to cheaper labor countries.

At the same time, there are posts about Foxconn build plants in US as well. Reports said that Foxconn invested plant in US with robot labor forces. Clearly, US is a great choice for such factories with its advanced technology and large electronic market. However, this is totally opposite to what the contract manufacturers are famous for—-cheap labor. Of course, they have done their homework. It must be more profit for them to draw such decision. Maybe it is the era that even the cheap labor force can no longer beat the technology efficiency.

We can hardly tell which is a better direction to go. But it becomes interesting to guess where will be the next Shenzhen. The countries with even cheaper labor forces? Or the countries with more efficient production lines and larger market?